EXHIBIT 4.5
MASTERING, INC.
1998 NON-QUALIFIED STOCK OPTION AGREEMENT
FOR EMPLOYEES
This 1998 Non-Qualified Stock Option Agreement (this "Agreement") is
entered into as of June __, 1998, effective as of __________, 1998 (the "Grant
Date"). Pursuant to this Agreement, Mastering, Inc., a Delaware corporation
(the "Corporation"), hereby grants to the undersigned optionee (the "Optionee"),
an employee or independent contractor of the Corporation, a non-qualified option
(the "Option") to purchase from the Corporation shares of its Common Stock, par
value $.001 per share ("Option Shares"), at the price set forth on the signature
page hereto, upon and subject to the terms and conditions set forth below.
1. Option Subject to Acceptance of Agreement. The Option shall be null
and void unless the Optionee shall accept this Agreement by executing it in the
space provided below and returning such original execution copy to the
Corporation. Capitalized terms not otherwise defined herein shall have the
meanings specified in Section 4.2.
2. Time and Manner of Exercise of Option
2.1 Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after _____________, 2008, being ten years following the Grant
Date (the "Option Term").
2.2 Exercise of Option. (a) Except as otherwise provided by Sections
2.2(b) and 2.2(c) hereof, the Option shall vest and become exercisable in
accordance with the following schedule: 25% of the Option Shares shall vest and
become exercisable on the first anniversary of the Grant Date; 25% of the Option
Shares shall vest and become exercisable on the second anniversary of the Grant
Date; 25% of the Option Shares shall vest and become exercisable on the third
anniversary of the Grant Date; and the remaining 25% of the Option Shares shall
vest and become exercisable on the fourth anniversary of the Grant Date.
(b) All or any part of any Option, to the extent unexercised, shall
terminate immediately if the Optionee ceases to be an employee of the
Corporation or (if applicable) ceases to be a consultant to the Corporation,
except that the Optionee shall have until the end of three (3) months
(extendible in the sole discretion of the Committee to the end of six (6)
months) following the date he or she ceases to be an employee of, or consultant
to, the Corporation to exercise any exercisable Option rights that he or she
could have exercised on the day on which such employment or service terminated;
provided, however, that such exercise must be accomplished prior to the
expiration of the Option Term. Notwithstanding the foregoing, if the Optionee
ceases to be an employee of, or a consultant to, the Corporation due to (i)
retirement on or after attaining the age of sixty-five (65) years (or such
earlier date as such person shall be permitted under the Corporation's
retirement plan), (ii) disability (as such term is defined in Section 422(c)(6)
of the Internal Revenue Code, the existence
of which shall be conclusively determined by the Committee in its sole
discretion) or (iii) death, then the Optionee, or the Optionee's Legal
Representative, shall have the right to exercise the portion of the Option which
is then vested and exercisable at the time of such retirement, disability or
death, but, in each case, only to the extent that the portion of the Option
which is then exercisable is exercised (i) within three (3) months following the
Optionee's retirement (extendible in the discretion of the Committee to six (6)
months), (ii) within one (1) year following the Optionee's disability, or (iii)
within one (1) year following the Optionee's death, as the case may be;
provided, further, that such exercise must be accomplished prior to the
expiration of the Option Term. If the Optionee ceases to be an employee of, or
a consultant to, the Corporation because of the Optionee's violation of his or
her duties to the Corporation, the existence of such violation to be
conclusively determined by the Committee in its sole discretion, any unexercised
portion of the Option shall immediately terminate and the Optionee shall have no
right to exercise any unexercised portion of the Option he or she might have
exercised prior to the date he or she ceased to be an employee of, or a
consultant to, the Corporation. When the Optionee ceases to be an employee of,
or a consultant to, the Corporation, any portion of the Option held by the
Optionee which is not then exercisable shall immediately lapse and be canceled.
(c) Upon a Change in Control, the Option, to the extent outstanding and
not yet exercisable, shall become fully exercisable.
2.3 Method of Exercise. Subject to the limitations set forth in this
Agreement, the Option may be exercised by the Optionee (1) by giving written
notice to the Corporation specifying the number of whole Option Shares to be
purchased and accompanied by payment therefor in full (or arrangement made for
such payment to the Corporation's satisfaction) either (i) in cash, (ii) by
delivery (either actual delivery or by attestation procedures established by the
Corporation) of previously owned whole shares of Common Stock (which the
Optionee has held for at lease six months prior to the delivery of such shares
or which the Optionee purchased on the open market and in each case for which
the Optionee has good title, free and clear of all liens and encumbrances)
having an aggregate Fair Market Value, determined as of the date of exercise,
equal to the aggregate purchase price payable pursuant to the Option by reason
of such exercise, (iii) in cash by a broker-dealer acceptable to the Corporation
to whom the Optionee has submitted an irrevocable notice of exercise or (iv) a
combination of (i) and (ii), and (2) by executing such documents as the
Corporation may reasonably request. Any fraction of a share of Common Stock
which would be required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the Optionee. No certificate
representing a share of Common Stock shall be delivered until the full purchase
price therefor has been paid.
2.4 Termination of Option. (a) In no event may the Option be exercised
after it terminates as set forth in this Section 2.4. The Option shall
terminate, to the extent not exercised pursuant to Section 2.3 or earlier
terminated pursuant to Section 2.2 at the expiration of the Option Term.
(b) In the event that rights to purchase all or a portion of the Option
Shares expire or are exercised, cancelled or forfeited, the Optionee shall, upon
the Corporation's request, promptly return this Agreement to the Corporation for
full or partial cancellation, as the case may be. Such cancellation shall be
effective regardless of whether the Optionee returns this Agreement. If the
Optionee continues to have rights to purchase Option Shares hereunder, the
Corporation shall, within
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10 days of the Optionee's delivery of this Agreement to the Corporation, either
(i) xxxx this Agreement to indicate the extent to which the Option has expired
or been exercised, cancelled or forfeited or (ii) issue to the Optionee a
substitute option agreement applicable to such rights, which agreement shall
otherwise be substantially similar to this Agreement in form and substance.
3. Additional Terms and Conditions of Option.
3.1 Nontransferability of Option. The Option may not be transferred by
the Optionee other than by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Corporation.
Except to the extent permitted by the foregoing sentence, during the Optionee's
lifetime the Option is exercisable only by the Optionee or the Optionee's Legal
Representative. Except to the extent permitted by the foregoing, this Agreement
shall not be assignable by the Optionee or the Optionee's Legal Representative.
3.2 Withholding Taxes. If the Corporation shall be required to withhold
any amounts by reason of federal, state or local tax laws, rules or regulations
in respect of the issuance of Option Shares pursuant to the exercise of the
Option, the Corporation shall be entitled to deduct and withhold such amounts
from any cash payments to be made to the Optionee. In any event, the Optionee
shall promptly pay to the Corporation, when requested by the Corporation,
sufficient funds to meet the requirements of such withholding, and the
Corporation shall be entitled to take such action and authorize such terms as it
may deem advisable in order to have such funds made available to the Corporation
from any funds or property due or to become due to the Optionee.
3.3 Adjustment. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities subject to the Option and the
purchase price per security shall be appropriately adjusted by the Board without
an increase in the aggregate purchase price. If any adjustment would result in
a fractional security being subject to the Option, the Corporation shall pay the
Optionee, in connection with the first exercise of the Option occurring after
such adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if any, of
(A) the Fair Market Value on the exercise date over (B) the exercise price of
the Option. The decision of the Committee regarding any such adjustment shall
be final, binding and conclusive.
3.4 Required Registration and Consents. If at any time the Committee
shall determine, in its sole discretion, that (i) the listing, registration, or
qualification of the Option Shares upon any securities exchange or under any
state or federal law or (ii) the consent or approval of any governmental
regulatory body or (iii) obtaining an investment representation or other
undertaking from the Optionee is necessary or desirable as a condition of, or in
connection with, the exercise of the Option hereunder, the Option may not be
exercised in whole or in part unless and until such listing, registration,
qualification, consent, approval, representation or undertaking shall have been
effected or obtained free of any conditions not acceptable by the Committee.
3.5 Delivery of Certificates. Upon the exercise of the Option, in whole
or in part, the Corporation shall deliver or cause to be delivered one or more
certificates representing the number
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of shares purchased against full payment therefor. The Corporation shall pay all
original issue or transfer taxes and all fees and expenses incident to such
delivery, except as otherwise provided in Section 3.2.
3.6 Option Confers No Rights as Stockholder. The Optionee shall not be
entitled to any privileges of ownership with respect to Option Shares unless
and until purchased and delivered upon the exercise of the Option, in whole or
in part, and the Optionee becomes a stockholder of record with respect to such
delivered shares; and the Optionee shall not be considered a stockholder of the
Corporation with respect to any such shares not so purchased and delivered.
3.7 Option Confers No Rights to Continued Employment or Consulting. In no
event shall the granting of the Option or its acceptance by the Optionee give or
be deemed to give the Optionee any right to continued employment by, or
continued status as a consultant to, the Corporation or any affiliate of the
Corporation.
3.8 Decisions of Board or Committee. The Board or the Committee shall
have the right to resolve all questions which may arise in connection with the
Option or its exercise. Any interpretation, determination or other action made
or taken by the Board or the Committee regarding this Agreement shall be final,
binding and conclusive.
3.9. Corporation to Reserve Shares. The Corporation shall at all times
prior to the expiration or termination of the Option reserve and keep available,
either in its treasury or out of its authorized and unissued shares of Common
Stock, the full number of shares subject to the Option from time to time.
4. Miscellaneous Provisions.
4.1. Designation as Nonqualified Stock Option. The Option is hereby
designated as not constituting an "incentive stock option" within the meaning of
section 422 of the Internal Revenue Code of 1986, as amended (the "Code"); this
Agreement shall be interpreted and treated consistently with such designation.
4.2. Meaning of Certain Terms. (a) As used herein, employment by the
Corporation shall include employment by an affiliate of the Corporation. In
addition, unless the context otherwise requests, references to the Corporation
include subsidiaries of the Corporation.
(b) As used herein, the following terms have the meanings set forth below:
"Board of Directors" or "Board" means the Board of Directors of the
Corporation as constituted at any time.
"Change in Control" shall be deemed to have occurred if (a) any
corporation, person or other entity (other than PLATINUM technology, inc.
("PLATINUM"), any majority-owned subsidiary of PLATINUM or any of their
respective subsidiaries, or an employee benefit plan (or related trust)
sponsored or maintained by PLATINUM or any of its subsidiaries), including
a "group" as defined in Section 13(d)(3) of the Securities Exchange
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Act of 1934, as amended, becomes the beneficial owner of stock representing
more than the greater of (i) twenty-five percent (25%) of the combined
Voting Power of PLATINUM's then outstanding securities or (ii) the
percentage of the combined Voting Power of PLATINUM's then outstanding
securities which equals (A) ten percent (10%) plus (B) the percentage of
the combined Voting Power of PLATINUM's outstanding securities held by such
corporation, person or entity on the Grant Date; (b)(i) the stockholders of
PLATINUM approve a definitive agreement to merge or consolidate PLATINUM
with or into another corporation other than a majority-owned subsidiary of
PLATINUM; or to sell or otherwise dispose of all or substantially all of
PLATINUM's assets, and (ii) the persons who were the members of the Board
of Directors of PLATINUM prior to such approval do not represent a majority
of the directors of the surviving, resulting or acquiring entity or the
parent thereof; (c) the stockholders of PLATINUM approve a plan of
liquidation of PLATINUM; or (d) within any period of 24 consecutive months,
persons who were members of the Board of Directors of PLATINUM immediately
prior to such 24-month period, together with any persons who were first
elected as directors (other than as a result of any settlement of a proxy
or consent solicitation contest or any action taken to avoid such a
contest) during such 24 month period by or upon the recommendation of
persons who were members of the Board of Directors of PLATINUM immediately
prior to such 24-month period and who constituted a majority of the Board
of Directors of PLATINUM at the time of such election, cease to constitute
a majority of the Board.
"Committee" means the Committee appointed by the Board to administer
this Agreement.
"Common Stock" means the common stock of the Corporation, par value
$.001 per share.
"Fair Market Value" on a specified date means (i) the closing (last
sale) price per share of a share of the Common Stock on such date (or, if
there is no sale on such date, then on the last previous day on which a
sale was reported) on the Nasdaq National Market or other national
securities market or exchange on which the Common Stock is then primarily
traded; or (ii) if shares of Common Stock are not so quoted or listed, then
the value of a share of Common Stock as determined by the Committee using
any reasonable method of valuation.
"Legal Representative" means an executor, administrator, legal
representative, guardian or similar person.
"Voting Power" means the voting power of any securities of the
Corporation then outstanding which are generally entitled to vote for the
election of directors of the Corporation.
4.3. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Corporation and any person or
persons who shall, upon the death of the Optionee, acquire any rights hereunder
in accordance with this Agreement.
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4.4. Notices. All notices, requests or other communications provided for
in this Agreement shall be made, if to the Corporation, to Mastering, Inc., 0000
X. Xxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, Attention: Secretary,
and if to the Optionee, to the address of the Optionee in the records of the
Corporation. All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to the party
entitled thereto, (b) by facsimile with confirmation of receipt, (c) by mailing
in the United States mails to the last known address of the party entitled
thereto or (d) by express courier service. The notice, request or other
communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication sent to the
Corporation is not received during regular business hours, it shall be deemed to
be received on the next succeeding business day of the Corporation.
4.5. Acknowledgement. The parties acknowledge that this Agreement is
implementing the grant of the Option to the Optionee on the Grant Date. The
Optionee understands that the merger of PT Acquisition Corporation I ("PT Sub"),
a wholly-owned subsidiary of PLATINUM technology, inc. ("PLATINUM"), with and
into the Corporation on April 21, 1998 does not accelerate or otherwise affect
the vesting schedule set forth in Section 2.2(a). Pursuant to Section 5.19 of
the Agreement and Plan of Merger dated as of February 18, 1998, as amended (the
"Merger Agreement"), among PLATINUM, PT Sub and the Corporation, the Optionee
acknowledges that, effective as of April 21, 1998, the Option becomes an option
to purchase shares of common stock of PLATINUM on the terms set forth below.
4.6. Governing Law. This Agreement, the Option and all determinations
made and actions taken pursuant hereto and thereto, to the extent not
mandatorily governed by the laws of the United States or the Delaware General
Corporate Law, shall be governed by the laws of the State of Illinois and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
4.7. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and both of which together shall
constitute one and the same instrument.
MASTERING, INC.
By: __________________________________
Name:
Title:
OPTIONEE:
I. Terms of Original Grant
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(a) Number of Original Option Shares:
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(b) Original Issue Date:
(c) Original Option Price Per Share: $
II. Terms of Substitute Option to Purchase Shares of Common Stock of PLATINUM
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(a) Number of current Option Shares:
(b) Current Option Price Per Share: $_______________
OPTIONEE ACKNOWLEDGMENT:
_______________________________
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