Exhibit 10.13
NOVELL, INC.
STOCK-BASED DEFERRED
COMPENSATION PLAN --
STOCK PURCHASE ASSISTANCE SUBPLAN
Effective as of October 14, 2004
STOCK PURCHASE ASSISTANCE SUBPLAN
INTRODUCTION
1.1 ESTABLISHMENT OF SUBPLAN. This Subplan, effective as of the Effective
Date, is established pursuant to the provisions of Section 8.4 of the Plan and
is intended as a subplan to the Plan.
1.2 PURPOSE OF SUBPLAN. The Company established the Subplan in connection
with the operation of the Plan after it was determined that the deferral of
Compensation under the Plan would result in adverse tax consequences to certain
participants in the SOP. This Subplan is intended to provide a vehicle for
select employees who participate in the SOP to achieve, and maintain, their SOR
under the SOP by offering them an opportunity to purchase shares of Common Stock
on the open market and to receive a potentially forgivable loan from the Company
for a portion of the purchase price of the shares of Common Stock purchased by
the employee. This Subplan is only available to those participants in the SOP
who would experience adverse tax consequences in the country they reside if they
deferred Compensation to the Plan. The Subplan will be interpreted in a manner
consistent with these intentions.
ARTICLE II
DEFINITIONS
Except as otherwise defined below, all capitalized terms used in this
Subplan shall have the meanings set forth in the Plan. For purposes of this
Subplan, the following terms shall have the following meanings:
2.1 AGGREGATE LOAN AMOUNT means the Loan Percentage, multiplied by
seventy-five percent (75%) of the Eligible Employee's Compensation.
2.2 EFFECTIVE DATE means the effective date of the Subplan, which is
September 20, 2004.
2.3 ELIGIBLE EMPLOYEE means any participant in the SOP who meets all of
the following eligibility requirements: (i) does not defer Compensation to the
Plan, (ii) is designated by the Committee to participate in the Subplan, and
(iii) is either not (A) a reporting person under Section 16 of the Securities
Exchange Act of 1934, as amended, or (B) otherwise prohibited from participating
in the Subplan because of applicable law.
2.4 FAIR MARKET VALUE means the closing price of the Common Stock on the
relevant trading day as reported in The Wall Street Journal.
2.5 LOAN PERCENTAGE means a percentage to be determined by the Committee
for each Plan Year, which such percentage shall not exceed 25%. Unless the
Committee determines otherwise prior to the beginning of the applicable Plan
Year, the Loan Percentage for purposes of
this Subplan shall be equal to the percentage used to determine the Matching
Contribution pursuant to Section 4.1 of the Plan.
2.6 PARTICIPANT means an Eligible Employee who is eligible to participate
in the Subplan as provided in Section 3.1 and who has determined to purchase
shares of Common Stock on the open-market during the Plan Year and enter into
the loan arrangement with the Company described in Section 3.3.
2.7 PLAN means the Novell, Inc. Stock-Based Deferred Compensation Plan.
2.8 PLAN YEAR means, for the first Plan Year, the Effective Date through
December 31, 2004. For each subsequent Plan Year, the Plan Year is the calendar
year.
2.9 SUBPLAN means the Stock Purchase Assistance Subplan, as set forth in
this document, as amended from time to time.
ARTICLE III
PARTICIPATION
3.1 ELIGIBILITY. An individual shall be eligible to participate in the
Subplan only to the extent and for the period that the individual is an Eligible
Employee. An individual who becomes an Eligible Employee at any time during the
Plan Year shall be eligible to participate in the Subplan for any period after
such individual becomes an Eligible Employee. An individual who ceases to be an
Eligible Employee during the Plan Year for any reason shall cease to be eligible
to participate in the Subplan as of the date such individual ceases to be an
Eligible Employee; provided, however, that any loans outstanding as of such date
will be subject to the provisions of Section 4.5 below.
3.2 PARTICIPATION. An Eligible Employee may purchase shares of Common
Stock on the open market at any time during the Plan Year, provided that such
Eligible Employee complies with all Company policies and procedures in
connection with such purchase(s). Purchases of Common Stock made prior to the
individual becomes an Eligible Employee shall not be covered by this Subplan.
3.3 LOAN. An Eligible Employee who purchases shares of Common Stock
during the Plan Year in accordance with Section 3.2 will have the opportunity to
enter into a loan arrangement with the Company pursuant to which the Company
will loan to the Eligible Employee an amount equal to (i) the Fair Market Value
of the shares of Common Stock purchased by the Eligible Employee while a
participant in this Subplan, multiplied by (ii) the Loan Percentage. For purpose
of the preceding sentence, Fair Market Value shall be determined as of the date
the Eligible Employee purchased such shares of Common Stock. The Eligible
Employee must notify the Company's Shareholder Services of his intent to enter
into such loan arrangement within thirty (30) days after the date the Eligible
Employee purchased the shares of Common Stock. In no event may the aggregate of
all loans made pursuant to this Plan to any Eligible Employee during any Plan
Year exceed the Aggregate Loan
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Amount. The terms of the loan shall be as set forth in Article IV below and as
determined by the Committee in its sole discretion.
ARTICLE IV
LOAN TERMS
4.1 LOAN PROCEDURES. The Company shall enter into a loan arrangement with
each Participant who presents to the Company's Shareholder Services evidence
certifying the purchase of shares of Common Stock in accordance with Section 3.2
and completes the forms necessary to certify such purchase. The information
required to certify such purchase and the timing such information must be
presented to the Company's Shareholder Services shall be as determined by the
Company's Shareholder Services, in its sole discretion. The loan will become
effective within thirty (30) days of the Participant's certification and the
Company shall provide the Participant with the loan proceeds at the same time as
the loan becomes effective.
4.2 LOAN TERMS. Each loan the Company enters into pursuant to Section 3.3
shall be evidenced by a loan agreement which shall provide that the loan shall
be due and payable in full on the January 1 that first occurs after the fifth
annual anniversary of the January 1 of the calendar year that the loan was made,
unless the loan is forgiven in accordance with Section 4.3 below or repaid
sooner in accordance with Section 4.4 below. The loan shall also be fully
recourse against the Participant. In addition, as collateral to secure the loan
until it is either fully forgiven or repaid, the Participant shall issue as
security for the loan all of the shares of Common Stock for which the loan
proceeds are determined. A certificate representing the secured shares of Common
Stock shall be delivered to the Company along with a stock power executed in
blank before funds will be issued under the loan. Interest shall be charged on
such loan at the rate determined by the Committee, in its sole discretion. The
loan agreement shall contain such other terms, provisions and conditions
consistent with the Subplan and applicable law as may be determined by the
Committee.
4.3 FORGIVENESS. Notwithstanding anything in this Subplan to the contrary,
each loan made to a Participant pursuant to Section 3.3 of this Subplan shall be
forgiven in full on the January 1 that first occurs after the fifth annual
anniversary of the January 1 of the calendar year that the loan was made,
provided the Participant is an Eligible Employee on such date. Notwithstanding
the preceding sentence, all such loans shall be forgiven in full prior to such
date if (i) the Participant terminates employment with the Company while an
Eligible Employee prior to such date on account of death or Disability, or (ii)
a Change in Control occurs while the Participant is an Eligible Employee.
4.4 MANDATORY REPAYMENT. In the event that the Participant's employment
with the Company terminates for any reason other than death or Disability, all
loans outstanding to the Participant shall be immediately due and payable,
unless the Committee determines otherwise. For this purpose, a termination of
employment with the Company shall not be deemed to occur merely because of the
Participant's transfer between the Company and any affiliate or subsidiary of
the Company. Any amounts due to the Company may be deducted from any payments
due from the Company to the Participant, if permitted by local law.
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4.5 CHANGE IN STATUS. If at any time while a loan issued pursuant to
Section 3.3 is outstanding, the Participant becomes a reporting person under
Section 16 of the Securities Exchange Act of 1934, as amended, or if applicable
law or regulation makes the loan impermissible, the Committee may take any of
the following actions with respect to the loan prior to the occurrence or
application of one of the foregoing events: (i) forgive the entire loan, (ii)
require immediate repayment of the loan, (iii) combination of (i) and (ii), or
(iv) take such other action that is permissible in accordance with applicable
law and regulation. If at any time while a loan issued pursuant to Section 3.3
is outstanding, the Participant ceases to be an Eligible Employee, but continues
as an employee of the Company or any affiliate or subsidiary of the Company, the
loan shall continue in accordance with its terms.
ARTICLE V
SUBPLAN ADMINISTRATION
5.1 SUBPLAN ADMINISTRATOR. This Subplan shall be administered by the
Committee, which will be the Subplan Administrator. The Committee members shall
be appointed by and serve at the pleasure of the Board.
5.2 AMENDMENT OR TERMINATION. Unless terminated sooner or extended, with
stockholder approval, by the Committee or the Board, the Subplan shall terminate
at the same time as the Plan. Upon termination of the Subplan, outstanding loans
will continue in effect in accordance with their terms. The Committee or the
Board may amend all or any provision of this Subplan, and may terminate the
Subplan in its entirety, at any time and for any reason. The Committee or the
Board may also amend the terms of any loan to comply with applicable law or
regulation if it is determined that such law or regulation would prohibit the
loan. In addition, the Committee or the Board may amend the terms of any loan if
any subsequently issued accounting rules results in adverse accounting
consequences to the Company.
5.3 ADMINISTRATION OF THE SUBPLAN. The Committee shall have the sole
authority to control and manage the operation and administration of the Subplan
and have all powers, authority and discretion necessary or appropriate to carry
out the Subplan provisions, and to interpret and apply the terms of the Subplan
to particular cases or circumstances. All decisions, determinations and
interpretations of the Committee will be binding on all interested parties and
will be given the maximum deference allowed by law. The Committee may impose
such restrictions or limitations on Participants in the Subplan that the
Committee deems necessary and appropriate to comply with applicable law. The
Committee may delegate its administrative powers to another committee or to an
individual, and all references to the Committee in the Plan shall mean the
Committee's delegatee.
Committee members who are Participants will abstain from voting on
any Subplan matters that relate primarily to themselves. The Board will identify
three or more individuals to serve as a temporary replacement of the Committee
members in the event that all members of the Committee must abstain from voting.
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5.4 INDEMNIFICATION. The Company will and hereby does indemnify and hold
harmless any of its employees, officers, directors or members of the Committee
who have fiduciary or administrative responsibilities with respect to the
Subplan from and against any and all losses, claims, damages, expenses and
liabilities (including reasonable attorneys' fees and amounts paid, with the
approval of the Board, in settlement of any claim) arising out of or resulting
from the implementation of a duty, act or decision with respect to the Subplan,
so long as such duty, act or decision does not involve gross negligence or
willful misconduct on the part of any such individual.
ARTICLE VI
MISCELLANEOUS
6.1 WITHHOLDING; PAYROLL TAXES. Participants shall be responsible for all
local, state, federal or foreign taxes that result from their entering into the
loan arrangement and forgiveness of any portion of a loan under this Subplan.
Participants will be required to pay to the Company or have withheld from other
Compensation received by the Participant from the Company the amount necessary
for the Company to satisfy its withholding obligations under local, state,
federal or foreign law that results from any loan arrangement and the
forgiveness of any portion of a loan.
6.2 NONALIENATION. No benefit or interest of any Participant under this
Subplan will be subject to any manner of assignment, alienation, anticipation,
sale, transfer, pledge or encumbrance, whether voluntary or involuntary.
6.3 LIMITATION OF RIGHTS. Nothing in this Subplan will be construed to
give a Participant the right to continue in the employ of the Company at any
particular position or to interfere with the right of the Company to discharge,
lay off or discipline a Participant at any time and for any reason, or to give
the Company the right to require any Participant to remain in its employ or to
interfere with the Participant's right to terminate his or her employment.
6.4 INCORPORATION OF TERMS OF THE PLAN. Except as otherwise provided
herein, the terms of the Plan are hereby incorporated by reference and a part of
this Subplan to the extent applicable.
6.5 GOVERNING LAW. To the extent that state law applies, the provisions of
this Subplan will be construed, enforced and administered in accordance with the
laws of the Commonwealth of Massachusetts.
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