EXHIBIT 10.2
WEBSIDESTORY, INC.
FORM OF STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT
UNDER THE 2006 EMPLOYMENT COMMENCEMENT EQUITY INCENTIVE AWARD PLAN
     WebSideStory, Inc. (the “Company”), pursuant to its 2006 Employment
Commencement Equity Incentive Award Plan (the “Plan”), hereby grants to the
Optionee listed below (“Optionee”), an option to purchase the number of shares
of the Company’s Stock set forth below. This Option is subject to all of the
terms and conditions as set forth herein and in the Plan and the attached Stock
Option Agreement, each of which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Stock Option Grant Notice and the attached Stock Option
Agreement.

     
Optionee:
   
 
   
 
   
Grant Date:
   
 
   
 
   
Vesting Commencement Date:
   
 
   
 
   
Exercise Price per Share:
  $                     per share
 
   
Total Number of Shares Granted:
   
 
   
 
   
Total Exercise Price:
  $                    
 
   
Expiration Date:
   
 
   

Type of Option:                 þ Non-Qualified Stock Option
Vesting Schedule:            [To be specified in individual agreements]
     By his or her signature and the Company’s signature below, Optionee agrees
to be bound by the terms and conditions of the Plan and the attached Stock
Option Agreement. Optionee has reviewed the attached Stock Option Agreement and
the Plan in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this option and fully understands all provisions of
this Stock Option Grant Notice, the attached Stock Option Agreement and the
Plan. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the administrator of the Plan upon any questions
arising under the Plan or this option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.

                          WEBSIDESTORY, INC.:       OPTIONEE:
 
                       
By:
          By:            
 
                       
Print Name:
          Print Name:            
 
                       
Title:
                       
 
                       
Address:
  10182 Telesis Court, 6th Floor       Address:            
 
                       
 
  San Diego, CA 92121                    
 
                       

GRANT NOTICE PAGE 1

 

--------------------------------------------------------------------------------

 

WEBSIDESTORY, INC.
2006 EMPLOYMENT COMMENCEMENT EQUITY INCENTIVE AWARD PLAN
STOCK OPTION AGREEMENT
     Pursuant to the Stock Option Grant Notice (“Grant Notice”) to which this
Stock Option Agreement (this “Agreement”) is attached, WebSideStory, Inc. (the
“Company”) has granted to the Optionee an option under the Company’s 2006
Employment Commencement Equity Incentive Award Plan (the “Plan”) to purchase the
number of shares of Stock indicated in the Grant Notice at the exercise price
indicated in the Grant Notice. Capitalized terms not specifically defined herein
shall have the meanings specified in the Plan. The Option is subject to the
terms and conditions of the Plan which are incorporated herein by reference.
ARTICLE I
GRANT OF OPTION
     1.1 Grant of Option. In consideration of the Optionee’s agreement to enter
into employment with the Company or a Subsidiary and for other good and valuable
consideration, effective as of the Grant Date set forth in the Grant Notice (the
“Grant Date”), the Company irrevocably grants to the Optionee the Option to
purchase any part or all of an aggregate of the number of shares of Stock set
forth in the Grant Notice, upon the terms and conditions set forth in this
Agreement. The Optionee acknowledges that the grant of the Option is an
essential inducement to the Optionee’s entering into employment with the Company
or a Subsidiary. The Option shall be a Non-Qualified Stock Option.
     1.2 Exercise Price. The exercise price per share of the shares of Stock
subject to the Option shall be as set forth in the Grant Notice, without
commission or other charge.
     1.3 Consideration to the Company. In consideration of the granting of the
Option by the Company, the Optionee agrees to render faithful and efficient
services to the Company or any Subsidiary, with such duties and responsibilities
as the Company shall from time to time prescribe. Nothing in the Plan or this
Agreement shall confer upon the Optionee any right to (a) continue in the employ
of the Company or any Subsidiary or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries, which are hereby expressly
reserved, to discharge the Optionee, if the Optionee is an Employee, or
(b) continue to provide services to the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company or its
Subsidiaries, which are hereby expressly reserved, to terminate the services of
Optionee, if the Optionee is a Consultant, at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided
otherwise in a written agreement between the Company and the Optionee.
ARTICLE II
PERIOD OF EXERCISABILITY
     2.1 Commencement of Exercisability.
          (a) Subject to Sections 2.3 and 4.8, the Option shall become
exercisable in such amounts and at such times as are set forth in the Grant
Notice.
          (b) No portion of the Option which has not become exercisable at
Termination of Service (as defined below) shall thereafter become exercisable,
except as may be otherwise provided by the Committee or as set forth in a
written agreement between the Company and the Optionee.
     2.2 Duration of Exercisability. The installments provided for in the
vesting schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 2.3.
STOCK OPTION AGREEMENT PAGE 1

 

--------------------------------------------------------------------------------

 

     2.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
          (a) The expiration of seven years from the Grant Date; or
          (b) The expiration of ninety days following the date of the Optionee’s
Termination of Service, unless such Termination of Service occurs by reason of
the Optionee’s death or Disability; or
          (c) The expiration of one year following the date of the Optionee’s
Termination of Service by reason of the Optionee’s death or Disability.
          (d) For purposes of this Agreement, “Termination of Service” means the
time when the service relationship (whether as an Employee, member of the Board
or a Consultant) between the Optionee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or Disability; but
excluding a termination where there is a simultaneous reemployment or continuing
employment or consultancy of the Optionee by the Company or any Subsidiary or a
“parent corporation” of the Company (within the meaning of Section 424 of the
Code). The Committee, in its absolute discretion, shall determine the effect of
all matters and questions relating to Termination of Service for the purposes of
this Agreement, and all questions of whether particular leaves of absence for
Optionees who are Employees of the Company or any of its Subsidiaries constitute
Terminations of Service.
ARTICLE III
EXERCISE OF OPTION
     3.1 Person Eligible to Exercise. Except as provided in Sections 4.2(b) and
4.2(c), during the lifetime of the Optionee, only the Optionee may exercise the
Option or any portion thereof. After the death of the Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 2.3, be exercised by the Optionee’s beneficiary
designated in accordance with Section 10.4 of the Plan. If no beneficiary has
been designated or survives the Optionee, the Option may be exercised by the
person entitled to such exercise pursuant to the Optionee’s will or the laws of
descent and distribution.
     3.2 Partial Exercise. Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 2.3.
     3.3 Manner of Exercise. The Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary of the Company or the
Secretary’s office of all of the following prior to the time when the Option or
such portion thereof becomes unexercisable under Section 2.3:
          (a) An exercise notice in writing signed by the Optionee or the other
person then entitled to exercise the Option or portion thereof, stating that the
Option or portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Committee. Such notice shall be
substantially in the form attached as Exhibit A (or such other form as is
prescribed by the Committee) (the “Exercise Notice”); and
    (b) (i) Full payment (in cash or by check) for the shares with respect to
which the Option or portion thereof is exercised, to the extent permitted under
applicable laws; or
          (ii) With the consent of the Committee, such payment may be made, in
whole or in part, through the delivery of shares of Stock which have been owned
by the Optionee for at least six months, duly endorsed for transfer to the
Company with a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof; or
          (iii) To the extent permitted under applicable laws, through the
delivery of a notice that the Optionee has placed a market sell order with a
broker with respect to shares of Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net
STOCK OPTION AGREEMENT PAGE 2

 

--------------------------------------------------------------------------------

 

proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided, that payment of such proceeds is made to the Company upon
settlement of such sale; or
          (iv) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii) and (iii); and
          (c) A bona fide written representation and agreement, in such form as
is prescribed by the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the shares of
Stock are being acquired for the Optionee’s own account, for investment and
without any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act and then applicable
rules and regulations thereunder, and that the Optionee or other person then
entitled to exercise such Option or portion thereof will indemnify the Company
against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the shares by
such person is contrary to the representation and agreement referred to above.
The Committee may, in its absolute discretion, take whatever additional actions
it deems appropriate to ensure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act
and any other federal or state securities laws or regulations. Without limiting
the generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Securities Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing Stock
issued on exercise of the Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and
          (d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option. With the consent of the Committee, (i) shares of
Stock owned by the Optionee for at least six months duly endorsed for transfer
or (ii) shares of Stock issuable to the Optionee upon exercise of the Option,
having a Fair Market Value at the date of Option exercise equal to the statutory
minimum sums required to be withheld, may be used to make all or part of such
payment; and
          (e) In the event the Option or portion thereof shall be exercised
pursuant to Section 3.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.
     3.4 Conditions to Issuance of Stock Certificates. The shares of Stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
          (a) The admission of such shares to listing on all stock exchanges on
which such Stock is then listed; and
          (b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
          (c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
          (d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or other employer corporation) is required to withhold upon
exercise of the Option; and
STOCK OPTION AGREEMENT PAGE 3

 

--------------------------------------------------------------------------------

 

          (e) The lapse of such reasonable period of time following the exercise
of the Option as the Committee may from time to time establish for reasons of
administrative convenience.
     3.5 Rights as Stockholder. The holder of the Option shall not be, nor have
any of the rights or privileges of, a stockholder of the Company in respect of
any shares purchasable upon the exercise of any part of the Option unless and
until such shares shall have been issued by the Company to such holder.
Notwithstanding any other provision of the Plan or this Agreement, unless
otherwise determined by the Committee or required by applicable law, rule or
regulation, the Company shall not deliver to the Optionee certificates
evidencing shares of Stock issued in connection with the exercise of this Option
and instead such shares of Stock will be recorded in the books of the Company
(or, as applicable, its transfer agent or stock plan administrator).
ARTICLE IV
OTHER PROVISIONS
     4.1 Administration. The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Optionee, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Option.
     4.2 Option Not Transferable.
          (a) Subject to Section 4.2(b), the Option may not be sold, pledged,
assigned or transferred in any manner other than by will or the laws of descent
and distribution unless and until the Option has been exercised, or the shares
underlying such Option have been issued, and all restrictions applicable to such
shares have lapsed. Neither the Option nor any interest or right therein shall
be liable for the debts, contracts or engagements of the Optionee or his or her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.
          (b) Notwithstanding any other provision in this Agreement, with the
consent of the Committee, the Option may be transferred to, exercised by and
paid to certain persons or entities related to the Optionee, including but not
limited to members of the Optionee’s family, charitable institutes or trusts or
other entities whose beneficiaries or beneficial owners are members of the
Optionee’s family or to such other persons or entities as may be expressly
approved by the Committee (each a “Permitted Transferee”), pursuant to such
conditions and procedures as the Committee may require. Any permitted transfer
will be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a “blind trust” in connection with the Optionee’s
Termination of Service with the Company or a Subsidiary to assume a position
with a governmental, charitable, educational or similar non-profit institution)
and on a basis consistent with the Company’s lawful issue of securities.
          (c) Unless transferred to a Permitted Transferee in accordance with
Section 4.2(b), during the lifetime of the Optionee, only the Optionee may
exercise the Option or any portion thereof. Subject to such conditions and
procedures as the Committee may require, a Permitted Transferee may exercise the
Option or any portion thereof during the Optionee’s lifetime. After the death of
the Optionee, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 2.3, be exercised by the
Optionee’s beneficiary designated in accordance with Section 10.4 of the Plan.
If no beneficiary has been designated or survives the Optionee, the Option may
be exercised by the person entitled to such exercise pursuant to the Optionee’s
will or the laws of descent and distribution.
STOCK OPTION AGREEMENT PAGE 4

 

--------------------------------------------------------------------------------

 

     4.3 Restrictive Legends and Stop-Transfer Orders.
          (a) The share certificate or certificates evidencing the shares of
Stock purchased hereunder shall be endorsed with any legends that may be
required by state or federal securities laws.
          (b) The Optionee agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
          (c) The Company shall not be required (i) to transfer on its books any
shares of Stock that have been sold or otherwise transferred in violation of any
of the provisions of this Agreement, or (ii) to treat as owner of such shares of
Stock or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such shares shall have been so transferred.
     4.4 Shares to Be Reserved. The Company shall at all times during the term
of the Option reserve and keep available such number of shares of Stock as will
be sufficient to satisfy the requirements of this Agreement.
     4.5 Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of the Secretary of the
Company, and any notice to be given to the Optionee shall be addressed to the
Optionee at the address given beneath the Optionee’s signature on the Grant
Notice. By a notice given pursuant to this Section 4.5, either party may
hereafter designate a different address for notices to be given to that party.
Any notice which is required to be given to the Optionee shall, if the Optionee
is then deceased, be given to the Optionee’s designated beneficiary if any, or
the person otherwise entitled to exercise his or her Option pursuant to
Section 3.1 by written notice under this Section 4.5. Any notice shall be deemed
duly given when sent via email or when sent by certified mail (return receipt
requested) and deposited in a post office or branch post office regularly
maintained by the United States Postal Service.
     4.6 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
     4.7 Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
     4.8 Conformity to Securities Laws. The Optionee acknowledges that the Plan
is intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
     4.9 Amendments. This Agreement may not be modified, amended or terminated
except by an instrument in writing, signed by the Optionee or such other person
as may be permitted to exercise the Option pursuant to Section 3.1 and by a duly
authorized representative of the Company.
     4.10 Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
the Optionee and his or her heirs, executors, administrators, successors and
assigns.
STOCK OPTION AGREEMENT PAGE 5

 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO GRANT NOTICE AND STOCK OPTION AGREEMENT
FORM OF EXERCISE NOTICE
     Effective as of today,                     , ___, the undersigned
(“Optionee”) hereby elects to exercise the Optionee’s option to purchase
                     shares of the common stock (the “Shares”) of WebSideStory,
Inc. (the “Company”) under and pursuant to the WebSideStory, Inc. 2006
Employment Commencement Equity Incentive Award Plan (the “Plan”) and the Stock
Option Grant Notice and Stock Option Agreement dated                     ,
___(the “Option Agreement”). Capitalized terms not specifically defined herein
shall have the meanings specified in the Option Agreement.

     
Grant Date:
   
 
   
 
   
Number of Shares as to which Option is Exercised:
 
 
 
   
Exercise Price per Share:
  $                    
 
   
Total Exercise Price:
  $                    
 
   
Certificate to be issued in name of:
   
 
   
 
   
Cash Payment delivered herewith:
  $                     (Representing the full Exercise Price for the Shares, as
well as any applicable withholding tax)

Type of Option:                 þ Non-Qualified Stock Option
     1. Representations of Optionee. The Optionee acknowledges that the Optionee
has received, read and understood the Plan and the Option Agreement. The
Optionee agrees to abide by and be bound by their terms and conditions.
     2. Rights as Stockholder. Until the Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to Shares subject to the Option,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Article 11 of the Plan.
     3. Tax Consultation. The Optionee understands that the Optionee may suffer
adverse tax consequences as a result of the Optionee’s purchase or disposition
of the Shares. The Optionee represents that the Optionee has consulted with any
tax consultants the Optionee deems advisable in connection with the purchase or
disposition of the Shares and that the Optionee is not relying on the Company
for any tax advice.
     4. Binding Effect. The Optionee agrees that the Shares are being acquired
in accordance with and subject to the terms, provisions and conditions of the
Plan and the Option Agreement, to all of which the Optionee hereby expressly
assents. This Agreement, the Plan and the Option Agreement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and the Optionee with respect to the subject
matter hereof.

              Submitted by:   Accepted by:
 
                    WEBSIDESTORY, INC.           Optionee        
 
      By:    
 
           
Address:
      Print Name:    
 
           
 
      Title:    
 
           

EXERCISE NOTICE PAGE 1