BLUE COAT SYSTEMS, INC. 1999 STOCK INCENTIVE PLAN

Name of Optionee:

Total Number of Shares Granted:

Type of Option:

Exercise Price Per Share:

Date of Grant:

Vesting Commencement Date:

Vesting Schedule:

Expiration Date:

By:

Title:

Print Name

Regular

Termination

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.

If the Company is subject to a “Change in Control” (as defined in the Plan) while you are in service, the exercisability of this option, to the extent outstanding at such time but not fully exercisable, shall automatically accelerate so that this option shall, immediately prior to the effective date of such Change in Control, become fully exercisable and vested for all of the shares of Common Stock subject to such option.

Immediately following the Change in Control, this option shall terminate and cease to be exercisable except to the extent assumed by the successor corporation (or parent thereof) in connection with such Change in Control

Restrictions on

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.

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.

•        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

and Stock

Withholding

Restrictions on

Resale

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.

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

The Plan and

Other Agreements