<PAGE> 1
As filed with the Securities and Exchange Commission on May 30, 1996
Registration No. 33-48395
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NOVELL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 87-0393339
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1555 NORTH TECHNOLOGY WAY
OREM, UT 84057
(Address, including zip code,
of principal executive offices)
NOVELL, INC. 1989 EMPLOYEE STOCK PURCHASE PLAN
1991 STOCK PLAN
(Full titles of the plans)
DAVID R. BRADFORD, ESQ.
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND CORPORATE SECRETARY
NOVELL, INC.
1555 NORTH TECHNOLOGY WAY
OREM, UTAH 84057
(801) 222-6000
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
Tor R. Braham, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
par value $0.10:
- - Upon exercise of options under Novell,
Inc. 1989 Employee Stock Purchase Plan 1,316,602 ----- ----- -----
- - Upon exercise of options and stock
purchase rights under 1991 Stock Plan 18,683,398 ----- ----- -----
- ---------------------------------------- ----------------------- ---------------------- --------------------- ---------------
TOTAL 20,000,000 ----- ----- -----
- ---------------------------------------- ----------------------- ---------------------- --------------------- ---------------
</TABLE>
(1) The purpose of the filing of this Post-Effective Amendment No. 1 is to
correct the designation of the plans to which it relates and to
properly indicate the allocation of the shares registered in the
original Registration Statement on Form S-8 (File No. 33-48395) between
the plans covered.
(2) All shares were previously registered under the Registration Statement
on Form S-8 (File No. 33-48395) filed with the Securities and Exchange
Commission (the "Commission") on June 5, 1992. A registration fee of
$165,260, calculated according to Rule 457(c), was paid upon the
previous registration of the shares. Accordingly, no fee is included
herewith.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission"):
1. The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated April 3, 1985,
and the description of the Registrant's Preferred Shares Rights Plan
and the Series A Junior Participating Preferred Shares issuable
thereunder contained in the Registration Statement on Form 8-A dated
December 12, 1988, filed pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including any
amendment or report filed for the purpose of updating such
descriptions.
2. The Registrant's Annual Report on Form 10-K for the year ended October
28, 1995, filed pursuant to Section 13(a) of the Exchange Act.
3. The Registrant's Quarterly Report on Form 10-Q for the quarter ended
January 27, 1996, filed pursuant to Section 13 of the Exchange Act.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, after the date of filing of this
Post-Effective Amendment to Registration Statement and prior to the filing of a
post-effective amendment indicating that all securities offered have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Counsel for the Registrant, Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304, has
rendered an opinion to the effect that the Common Stock offered hereby will,
when issued in accordance with the Registrant's 1991 Stock Plan or 1989 Employee
Stock Purchase Plan, be legally and validly issued, fully paid and
nonassessable. Larry W. Sonsini, a member of such law firm, is a director of the
Registrant and owns 6,600 shares of Registrant's Common Stock plus options to
purchase an additional 55,000 shares of Registrant's Common Stock.
II-1
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Further, in accordance with the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation eliminates the liability of a director
of the Registrant to the Registrant and its stockholders for monetary damages
for breaches of such director's fiduciary duty of care in certain instances.
Article VII of the Bylaws of the Registrant provides for indemnification of
certain agents to the maximum extent permitted by the Delaware General
Corporation Law. Persons covered by this indemnification provision include any
current or former directors, officers, employees and other agents of the
Registrant, as well as persons who serve at the request of the Registrant as
directors, officers, employees or agents of another enterprise.
In addition, the Registrant has entered into contractual agreements
with certain directors and officers of the Registrant designated by the Board to
indemnify such individuals to the full extent permitted by law. These agreements
also resolve certain procedural and substantive matters that are not covered, or
are covered in less detail, in the Bylaws or by the Delaware General Corporation
Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-2
<PAGE> 5
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Number Document
----- --------
<S> <C>
4.1 Novell, Inc. 1989 Employee Stock Purchase Plan, together with forms of Subscription
Agreement and Withdrawal Agreement thereunder.
4.2* Summary memorandum of the Novell, Inc. 1989 Employee Stock Purchase Plan.
4.3 Novell, Inc. 1991 Stock Plan and forms of Option Agreement currently used thereunder.
5.1** Opinion of Wilson Sonsini Goodrich & Rosati with respect to the securities being
registered (1991 Stock Plan).
5.2 Opinion of Wilson Sonsini Goodrich & Rosati with respect to the securities being
registered (1989 Employee Stock Purchase Plan).
23.1*** Consent of Independent Auditors (Ernst & Young LLP).
23.2*** Consent of Independent Auditors (Price Waterhouse LLP).
23.3 Consent of Counsel (contained in Exhibits 5.1 and 5.2).
24.1 Power of Attorney (See page II-6).
</TABLE>
* Incorporated by reference to exhibit filed with the Registrant's
Registration Statement on Form S-8 (File No. 33-31299) filed on
September 28, 1989.
** Incorporated by reference to exhibit filed with the Registrant's
Registration Statement on Form S-8 (File No. 33-48395) filed on June
5, 1992.
*** Incorporated by reference to exhibit filed with the Registrant's Form
10-K for the fiscal year ended October 28, 1995 (File No. 0-13351)
filed on January 26, 1996.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the
II-3
<PAGE> 6
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 hereof, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in San Jose, California on May 29, 1996.
NOVELL, INC.
By: /s/ Robert J. Frankenberg
------------------------------------
Robert J. Frankenberg
Chairman of the Board, President,
Chief Executive Officer and Director
II-5
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert J. Frankenberg and David R.
Bradford, jointly and severally, his or her attorneys-in-fact, each with the
power of substitution, for him or her in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorney-in-fact, or his substitute or substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------------- -------------------------------------- ----------------
<S> <C> <C>
/s/ Robert J. Frankenberg Chairman of the Board, President, May 29, 1996
- --------------------------------------------------
Robert J. Frankenberg Chief Executive Officer and Director
(Principal Executive Officer)
/s/ James R. Tolonen Executive Vice President and Chief May 29, 1996
- --------------------------------------------------
James R. Tolonen Financial Officer (Principal Financial
Officer)
/s/ Stephen C. Wise Senior Vice President, Finance May 29, 1996
- --------------------------------------------------
Stephen C. Wise (Chief Accounting Officer)
/s/ Alan C. Ashton Director May 29, 1996
- --------------------------------------------------
Alan C. Ashton
/s/ Elaine R. Bond Director May 29, 1996
- --------------------------------------------------
Elaine R. Bond
/s/ Hans-Werner Hector Director May 29, 1996
- --------------------------------------------------
Hans-Werner Hector
/s/ Jack L. Messman Director May 29, 1996
- --------------------------------------------------
Jack L. Messman
Director
- --------------------------------------------------
Larry W. Sonsini
/s/ Ian R. Wilson Director May 29, 1996
- --------------------------------------------------
Ian R. Wilson
/s/ John A. Young Director May 29, 1996
- -------------------------------------
John A. Young
</TABLE>
II-6
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------------- ----------------------------------------------------------------------------------------------
<S> <C>
4.1 Novell, Inc. 1989 Employee Stock Purchase Plan, together with forms of Subscription
Agreement and Withdrawal Agreement thereunder.
4.2* Summary memorandum of the Novell, Inc. 1989 Employee Stock Purchase Plan.
4.3 Novell, Inc. 1991 Stock Plan and forms of Option Agreement currently used thereunder.
5.1** Opinion of Wilson Sonsini Goodrich & Rosati with respect to the securities being registered
(1991 Stock Plan).
5.2 Opinion of Wilson Sonsini Goodrich & Rosati with respect to
the securities being registered (1989 Employee Stock Purchase
Plan).
23.1*** Consent of Independent Auditors (Ernst & Young LLP).
23.2*** Consent of Independent Auditors (Price Waterhouse LLP).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (See page II-6).
</TABLE>
- ---------------------
* Incorporated by reference to exhibit filed with the
Registrant's Registration Statement on Form S-8 (File No.
33-3129) filed on September 28, 1989.
** Incorporated by reference to exhibit filed with the Registrant's
Registration Statement on Form S-8 (File No. 33-48395) filed on June 5,
1992.
*** Incorporated by reference to exhibits filed with the Registrant's Form
10-K for the fiscal year ended October 28, 1995 (File No. 0-13351)
filed on January 26, 1996.
<PAGE> 1
EXHIBIT 4.1
NOVELL, INC.
1989 EMPLOYEE STOCK PURCHASE PLAN
(As amended April 12, 1995)
The following constitute the provisions of the 1989 Stock Purchase Plan
of Novell, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Novell, Inc.
(e) "Compensation" shall mean all payments for base straight
time and all sales commission not in excess of target income.
(f) "Continuous Status as an Employee" shall mean the absence
of any interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
(g) "Designated Subsidiaries" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an officer,
whose customary employment with the Company or any Designated Subsidiary is at
least twenty (20) hours per week and more than five (5) months in any calendar
year.
(i) "Enrollment Date" shall mean the first day of each
Offering Period.
(j) "Exercise Date" shall mean the last day of each
Offering Period.
(k) "Offering Period" shall mean, except with respect to the
first Offering Period as described herein, a period of six (6) months during
which an option granted pursuant to the Plan may be exercised. The second
Offering Period shall commence with the beginning of the regular payroll period
falling closest to May 1, 1990 and end with the end of the regular payroll
period closest to October 31, 1990. Subsequent periods shall be as stated in
Section 4 below.
(l) "Plan" shall mean this 1989 Employee Stock Purchase Plan.
<PAGE> 2
(m) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who is employed by
the Company on a given Enrollment Date shall be eligible to participate in the
Plan.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 425 (d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any subsidiary of the Company, or (ii)
which permits his or her rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate which
exceeds Twenty-five Thousand Dollars ($25,000) worth of stock (determined at the
fair market value of the shares at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing with the beginning of the
regular payroll period falling closest to May 1 and November 1 of each year;
provided, however, that the first Offering Period shall commence with the
beginning of the regular payroll period falling closest to September 25, 1989
and end with the end of the regular payroll period falling closest to April 30,
1990. The Plan shall continue thereafter until terminated in accordance with
paragraph 19 hereof. Subject to the shareholder approval requirements of
paragraph 19, the Board of Directors of the Company shall have the power to
change the duration of Offering Periods with respect to future offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan
by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's payroll office
at least five (5) business days prior to the applicable Enrollment Date, unless
a later time for filing the subscription agreement is set by the Board for all
eligible Employees with respect to a given Offering Period.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in paragraph 10.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each payday
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he receives on each payday during the Offering Period, and
the aggregate of such payroll deductions during the Offering Period shall not
exceed ten percent (10%) of the participant's Compensation during said Offering
Period.
(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and will be withheld in whole
percentages only. A participant may not make any additional payments into such
account.
-2-
<PAGE> 3
(c) A participant may discontinue his or her participation in
the Plan as provided in paragraph 10, or may decrease, or (if the Board or its
committee shall determine) may increase, the rate of his or her payroll
deductions during the Offering Period (within the limitations of Section 16(a))
by completing or filing with the Company a new subscription agreement
authorizing a change in payroll deduction rate. The Board shall be authorized to
limit the number of participation rate changes during any Offering Period. The
change in rate shall be effective with the first full payroll period following
five (5) business days after the Company's receipt of the new subscription
agreement unless the Company elects to process a given change in participation
more quickly. A participant's subscription agreement shall remain in effect for
successive Offering Periods unless revised as provided herein or terminated as
provided in paragraph 10.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423 (b) (8) of the Code and paragraph 3 (b) herein, a
participant's payroll deductions may be decreased to 0% at such time during any
Offering Period which is scheduled to end during the current calendar year (the
"Current Offering Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Offering Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in paragraph 10.
(e) At the time the option is exercised, in whole or in part,
or at the time some or all of the Company's Common Stock issued under the Plan
is disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period up to a
number of shares of the Company's Common Stock determined by dividing such
Employee's payroll deductions accumulated prior to such Exercise Date and
retained in the Participant's account as of the Exercise Date by the lower of
(i) eighty-five percent (85%) of the fair market value of a share of the
Company's Common Stock on the Enrollment Date or (ii) eighty-five percent (85%)
of the fair market value of a share of the Company's Common Stock on the
Exercise Date; provided that in no event shall an Employee be permitted to
purchase during each Offering Period more than a number of shares determined by
dividing $12,500 by the fair market value of a share of the Company's Common
Stock on the Enrollment date, and provided further that such purchase shall be
subject to the limitations set forth in Section 3 (b) and 12 hereof. Exercise of
the option shall occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 10, and shall expire on the last day of the
Offering Period. Fair market value of a share of the Company's Common Stock
shall be determined as provided in Section 7 (b) herein.
(b) The option price per share of the shares offered in a
given Offering Period shall be lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however, that
where there is a public market for the Common Stock, the fair market value per
share shall be the closing bid price of the Common System, or, in the event the
Common Stock is listed on a stock exchange, the fair market value per share will
be the closing price on such exchange on such date, as reported in the Wall
Street Journal. In the event the Enrollment Date or the Exercise Date occurs on
a weekend or legal holiday, the fair market value shall be based on the closing
bid price on the next trading day.
-3-
<PAGE> 4
8. Exercise of Option. Unless a participant withdraws from the
Plan as provided in paragraph 10 below, his or her option for the purchase of
shares will be exercised automatically on the Exercise Date, and the maximum
number of full shares subject to option shall be purchased for such participant
at the applicable option price with the accumulated payroll deductions in his or
her account. No fractional shares will be purchased and any payroll deductions
accumulated in a participant's account which are not used to purchase shares
shall be refunded to the participant or retained in the participant's account
for the subsequent Offering Period, as the Board or its committee shall
determine, subject to an earlier withdrawal by the participant as provided in
paragraph 10. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
If a participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) Upon termination of the participant's Continuous Status as
an Employee prior to the Exercise Date for any reason, including retirement or
death, the payroll deductions credited to such participant's account during the
Offering Period but not yet used to exercise the option will be returned to such
participant or, in case of his or her death, to the person or persons entitled
thereto under paragraph 14, and such participant's option will be automatically
terminated.
(c) In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per week
during an Offering Period in which the Employee is a participant, he or she will
be deemed to have elected to withdraw from the Plan and the payroll deductions
credited to his or her account will be refunded to such participant and such
participant's option terminated.
(d) A participant's withdrawal from an Offering Period will
not have any effect upon his or her eligibility to participate in any similar
plan which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from which
the participant withdraws.
11. Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 8,000,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 18. If on a given Exercise Date the number of shares with respect
to which options are to be exercised exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.
-4-
<PAGE> 5
(b) The participant will have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan
will be registered in the name of the participant or in the name of the
participant and his or her spouse.
13. Administration. The Plan shall be administered by the Board
of the Company or a committee of members of the Board appointed by the Board.
The administration, interpretation or application of the Plan by the Board or
its committee shall be final, conclusive and binding upon all participants.
Members of the Board who are eligible Employees are permitted to participate in
the Plan, provided that:
(a) Members of the Board who are eligible to participate in
the Plan may not vote on any matter affecting the administration of the Plan or
the grant of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan, no
member of the Board who is eligible to participate in the Plan may be a member
of the committee.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with paragraph 10.
16. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
payroll deductions, the per share purchase price, the number of shares purchased
and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized
for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share
-5-
<PAGE> 6
of Common Stock covered by each option under the Plan which has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the
number of shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of a consolidation of the Company or merger with or into
any other corporation.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and
for any reason terminate or amend the Plan. Except as provided in paragraph 18,
no such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best interest
of the Company and its shareholders. Except as provided in paragraph 18, no
amendment may make any change in any option theretofore granted which adversely
affects the rights of any participant. In addition, to the extent necessary to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or
under Section 423 of the Code (or any successor rule or provision or any other
applicable law or regulation), the Company shall obtain shareholder approval in
such a manner and to such a degree as so required.
(b) Without shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.
20. Notices. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for
-6-
<PAGE> 7
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under paragraph 19.
23. Transfer of Control. A "Transfer of Control" will be
considered to have occurred in the event of any of the following occurs with
respect to the Company:
(a) the direct or indirect sale or exchange by the Company's
shareholders of all or substantially all of the Company's stock where the
Company's shareholders before the sale or exchange do not retain, directly or
indirectly, at least a majority of the beneficial interest in the Company's
voting stock; or
(b) a merger in which the Company's shareholders before the
merger do not retain, directly or indirectly, at least a majority of the
beneficial interest in the Company's voting stock; or
(c) the sale, exchange, or transfer of all or substantially
all of the Company's assets (other than a sale exchange, or transfer to one or
more corporations where the Company's shareholders before the sale, exchange, or
transfer retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the corporation(s) to which the assets were
transferred).
In the event of a Transfer of Control, the Board, in its sole
discretion, will either (i) provide that options granted under the Plan will be
fully exercisable to the extent of each participant's accumulated withholding
for the Offering Period as of the date prior to the Transfer of Control, as the
Board determines, or (ii) arrange with the surviving, continuing, successor or
purchasing corporation, as the case may be, that the corporation assume the
Company's rights and obligations under the Plan.
-7-
<PAGE> 8
EXHIBIT A
Name: Employee Number:
------------------------------------------------- ------
(please print) (First) (Middle) (Last)
Address:
------------------------------------------------------------------------
(Street) (City) (State) (Zip)
Social Security Number:
---------------------------------------------------------
Novell Office Location: Department Number:
-------------------- ---------------
Today's Date: Enrollment Date:
------------------- ---------------------------
NOVELL, INC.
1989 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____Original Application
_____Change in Payroll Deduction Rate
_____Change of Beneficiary(ies)
1. I hereby elect to participate in the Novell, Inc. 1989 Employee Stock
Purchase Plan (the "Employee Stock Purchase Plan") and subscribe to purchase
shares of Novell's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.
2. I HEREBY AUTHORIZE PAYROLL DEDUCTIONS FROM EACH PAYCHECK IN THE AMOUNT
OF % OF MY COMPENSATION ON EACH PAYDAY (NOT TO EXCEED 10%) DURING THE
OFFERING PERIOD IN ACCORDANCE WITH THE EMPLOYEE STOCK PURCHASE PLAN. (PLEASE
NOTE THAT NO FRACTIONAL PERCENTAGES ARE PERMITTED.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. I have received a copy of the complete "Novell, Inc. 1989 Employee Stock
Purchase Plan." I understand that my participation in the Employee Stock
Purchase Plan is in all respects subject to the terms of the Employee Stock
Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan will be
issued as my name appears in the Human Resource data base or in Joint Tenancy as
stated below:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within two (2) years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be treated for
federal income tax purposes as having received ordinary income at the time of
such disposition in an amount equal to the excess of the fair market value of
the shares at the time such shares were delivered to me over the price which I
paid for the shares. I HEREBY AGREE TO NOTIFY NOVELL IN WRITING WITHIN 30 DAYS
AFTER THE DATE OF ANY SUCH DISPOSITION AND I WILL MAKE ADEQUATE PROVISION FOR
FEDERAL, STATE, OR OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON
THE DISPOSITION OF THE COMMON STOCK. Novell may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to sale or early
disposition of common stock by me. If I dispose of such shares at any time after
the expiration of the two-year holding period, I understand that I will be
treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income
only
-8-
<PAGE> 9
to the extent of the amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition over the purchase
price which I paid for the shares, or (2) 15% of the fair market value of the
shares on the first day of the Offering Period. The remainder of the gain, if
any, recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
NAME OF PRIMARY BENEFICIARY: (please print)
- -------------------------------------------------------------- -------------
(First) (Middle) (Last) (Relationship)
- --------------------------------------------------------------------------------
(Street Address) (City) (State) (Zip)
NAME OF SECONDARY BENEFICIARY: (please print)
- --------------------------------------------------------------- -------------
(First) (Middle) (Last) (Relationship)
- --------------------------------------------------------------------------------
(Street Address) (City) (State) (Zip)
9. It is agreed that this Agreement will be interpreted and construed in
accordance with the laws of that jurisdiction in which enforcement is sought.
Should any portion of this Agreement be judicially held to be invalid,
unenforceable or void, such holding will not have the effect of invalidating the
remainder of this Agreement or any other part thereof, the parties hereby
agreeing that the portion so held to be invalid, unenforceable, or void will, if
possible, be deemed amended or reduced in scope. This Agreement will supersede
the terms of any prior agreement or understanding between the parties regarding
the subject matter hereof, and constitutes the full and entire understanding
between the parties regarding the subject matter hereof. This Agreement may be
modified or amended only in writing signed by an officer of Novell and me. I
AGREE AND ACKNOWLEDGE NOVELL'S "AT WILL" EMPLOYMENT POLICY, WHICH IS THAT NOVELL
RESERVES THE RIGHT TO DISCONTINUE MY EMPLOYMENT AT ANY TIME FOR ANY REASON OR NO
REASON WITHOUT NOTICE, AND THAT NOVELL ACCORDS ME THE RIGHT TO DISCONTINUE
EMPLOYMENT AT ANY TIME FOR ANY REASON OR NO REASON WITHOUT NOTICE. NOVELL AGREES
AND ACKNOWLEDGES THAT ITS "AT WILL" EMPLOYMENT POLICY MAY NOT BE ENFORCEABLE IN
THE JURISDICTION IN WHICH YOU ARE DOMICILED. I AGREE THAT NOTHING IN THIS
AGREEMENT WILL BE CONSTRUED AS A LIMITATION OF THE RIGHTS OF NOVELL TO TERMINATE
MY EMPLOYMENT WITH NOVELL AT ANY TIME FOR ANY REASON OR NO REASON, WITHOUT
NOTICE.
I UNDERSTAND THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
- ---------- -------------------------------------------------------
DATE SIGNATURE OF EMPLOYEE
-9-
<PAGE> 10
EXHIBIT B
Name: Employee Number:
------------------------------------------- ------------
(please print) (First) (Middle) (Last)
Address:
------------------------------------------------------------------------
(Street) (City) (State) (Zip)
Social Security Number:
--------------------------------------------------------
Novell Office Location: Department Number:
--------------------- ---------------
Today's Date: Withdrawal Date:
----------------------- ------------------------
NOVELL, INC.
1989 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Novell, Inc. 1989
Employee Stock Purchase Plan which began on
______________________________________, 19 ____ (the "Enrollment Date") hereby
notifies Novell that he or she hereby withdraws from the Offering Period. He or
she hereby directs Novell to pay to the undersigned as promptly as practicable
all the payroll deductions credited to his or her account with respect to such
Offering Period. The undersigned understands and agrees that his or her option
for such Offering Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be made for the
purchase of shares in the current Offering Period and the undersigned shall be
eligible to participate in succeeding Offering Periods only by delivering to
Novell a new Subscription Agreement.
Dated:
-------------------- --------------------------------
Signature of Employee
-10-
<PAGE> 1
EXHIBIT 4.3
NOVELL, INC.
1991 STOCK PLAN
AS AMENDED APRIL 12, 1995
1. Purpose of the Plan. The purpose of the Novell, Inc. 1991 Stock
Plan is to enable Novell, Inc. to provide an incentive to eligible employees,
consultants and officers whose present and potential contributions are important
to the continued success of the Company, to afford these individuals the
opportunity to acquire a proprietary interest in the Company, and to enable the
Company to enlist and retain in its employment the best available talent for the
successful conduct of its business. It is intended that this purpose will be
effected through the granting of (a) stock options, (b) stock purchase rights,
(c) stock appreciation rights, and (d) long-term performance awards.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or such of its Committees
as shall be administering the Plan, in accordance with Section 5 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under applicable securities laws,
Delaware corporate law and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 5 of the Plan.
(f) "Common Stock" means the Common Stock, $.10 par value, of
the Company.
(g) "Company" means Novell, Inc., a Delaware corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship is not interrupted or terminated
by the Company, any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive Stock
Options, any such leave may not exceed ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain
Company policies) or statute; or (ii) transfers between locations of the Company
or between the Company, its Parent, its Subsidiaries or its successor.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
<PAGE> 2
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market
trading day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
-2-
<PAGE> 3
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(p) "Long-Term Performance Award" means an award under Section
9 below. A Long-Term Performance Award shall permit the recipient to receive a
cash or stock bonus (as determined by the Administrator) upon satisfaction of
such performance factors as are set out in the recipient's individual grant.
Long-term Performance Awards will be based upon the achievement of Company,
Subsidiary and/or individual performance factors or upon such other criteria as
the Administrator may deem appropriate.
(q) "Long-Term Performance Award Agreement" means a written
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Long-Term Performance Award grant. The Long-Term
Performance Award Agreement is subject to the terms and conditions of the Plan.
(r) "Nonstatutory Stock Option" means any Option that is not
an Incentive Stock Option.
(s) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option, Stock Purchase Right, SAR
or Long-Term Performance Award grant. The Notice of Grant is part of the Option
Agreement, the SAR Agreement and the Long-Term Performance Award Agreement.
(t) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(u) "Option" means a stock option granted pursuant to the
Plan.
(v) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(w) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.
(x) "Optioned Stock" means the Common Stock subject to an
Option or Right.
(y) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Right.
(z) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
-3-
<PAGE> 4
(aa) "Plan" means this 1991 Stock Plan.
(bb) "Restricted Stock" means shares of Common Stock subject to
a Restricted Stock Purchase Agreement acquired pursuant to a grant of Stock
Purchase Rights under Section 8 below.
(cc) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(dd) "Right" means and includes SARs, Long-Term Performance
Awards and Stock Purchase Rights granted pursuant to the Plan.
(ee) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor rule thereto, as in effect when discretion is being exercised with
respect to the Plan.
(ff) "SAR" means a stock appreciation right granted pursuant to
Section 7 of the Plan.
(gg) "SAR Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual SAR
grant. The SAR Agreement is subject to the terms and conditions of the Plan.
(hh) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
-4-
<PAGE> 5
(ii) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 8 of the Plan, as evidenced by a Notice of Grant.
(jj) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Eligibility. Nonstatutory Stock Options and Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. If otherwise eligible, an Employee or Consultant who has been
granted an Option or Right may be granted additional Options or Rights.
4. Stock Subject to the Plan. Subject to the provisions of Section
11 of the Plan, the total number of Shares reserved and available for issuance
under the Plan is 28,933,478 Shares, increased each November 1 from and
including November 1, 1994 by a number of Shares equal to 2.9% of the number of
Shares outstanding as of the last Saturday of the October preceding each such
November 1. The maximum number of Shares reserved and available for issuance
pursuant to Incentive Stock Options is 20,000,000 Shares.
Subject to Section 11 of the Plan, if any Shares that have been optioned
under an Option cease to be subject to such Option (other than through exercise
of the Option), or if any Option or Right granted hereunder is forfeited, or any
such award otherwise terminates prior to the issuance of Common Stock to the
participant, the Shares that were subject to such Option or Right shall again be
available for distribution in connection with future Option or right grants
under the Plan. In addition, Shares that have been subject to SARs exercised for
cash, whether granted in connection with or independently of options, shall
again be available for distribution under the Plan. Shares that have actually
been issued under the Plan, whether upon exercise of an Option or Right, shall
not in any event be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, and the
original purchaser of such Shares did not receive any benefits of ownership of
such Shares, such Shares shall become available for future grant under the Plan.
For purposes of the preceding sentence, voting rights shall not be considered a
benefit of Share ownership.
5. Administration.
(a) Composition of Administrator.
(i) Multiple Administrative Bodies. If permitted by
Rule 16b-3 and Applicable Laws, the Plan may (but need not) be administered by
different administrative bodies with respect to (A) Directors who are employees,
(B) Officers who are not Directors and (C) Employees who are neither Directors
nor Officers.
(ii) Administration with respect to Directors and
Officers. With respect to grants of Options and Rights to eligible participants
who are Officers or Directors of the Company, the Plan shall be administered by
(A) the Board, if the Board may administer the Plan in compliance with Rule
16b-3 as it applies to a plan intended to qualify thereunder as a discretionary
grant or award plan, or (B) a Committee designated by the Board to administer
the Plan, which Committee shall be constituted (1) in such a manner as to permit
the Plan to comply with Rule 16b-3 as it applies to a plan intended to qualify
thereunder as a discretionary grant or award plan and (2) in such a manner as to
satisfy the Applicable Laws.
-5-
<PAGE> 6
(iii) Administration with respect to Other Persons.
With respect to grants of Options to eligible participants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws.
(iv) General. Once a Committee has been appointed
pursuant to subsection (ii) or (iii) of this Section 5(a), such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of any Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies (however caused)
and remove all members of a Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws and, in the case of a
Committee appointed under subsection (ii), to the extent permitted by Rule 16b-3
as it applies to a plan intended to qualify thereunder as a discretionary grant
or award plan.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Rights may be granted hereunder;
(iii) to determine whether and to what extent Options
and Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock
to be covered by each Option and Right granted hereunder;
-6-
<PAGE> 7
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Right or
the shares of Common Stock relating thereto, based in each case on such factors
as the Administrator, in its sole discretion, shall determine;
(vii) to construe and interpret the terms of the Plan;
(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(ix) to determine whether and under what circumstances
an Option or Right may be settled in cash instead of Common Stock or Common
Stock instead of cash;
(x) to reduce the exercise price of any Option or
Right;
(xi) to modify or amend each Option or Right (subject
to Section 13 of the Plan);
(xii) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Right
previously granted by the Administrator;
(xiii) to institute an Option Exchange Program;
(xiv) to determine the terms and restrictions applicable
to Options and Rights and any Restricted Stock; and
(xv) to make all other determinations deemed necessary
or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Rights.
6. Duration of the Plan. The Plan shall remain in effect until
terminated by the Board under the terms of the Plan, provided that in no event
may Incentive Stock Options be granted under the Plan later than 10 years from
the date the Plan was adopted by the Board.
7. Options and SARs.
(a) Options. The Administrator, in its discretion, may grant
Options to eligible participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatutory Stock Options. Each Option shall be
evidenced by a Notice of Grant which shall expressly identify the Options as
Incentive Stock Options or as Nonstatutory Stock Options, and be in such form
and contain such provisions as the Administrator shall from time to time deem
appropriate. Without limiting the foregoing, the Administrator may at any time
authorize the Company, with the consent of the respective recipients, to issue
new Options or Rights in exchange for the surrender and cancellation of
outstanding Options or Rights. Option agreements shall contain the following
terms and conditions:
-7-
<PAGE> 8
(i) Exercise Price; Number of Shares. The per Share
exercise price for the Shares issuable pursuant to an Option shall be such price
as is determined by the Administrator; provided, however, that in the case of an
Incentive Stock Option, the price shall be no less than 100% of the Fair Market
Value of the Common Stock on the date the Option is granted, subject to any
additional conditions set out in Section 7(a)(iv) below.
The Notice of Grant shall specify the number of Shares to
which it pertains.
(ii) Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator will determine the terms and conditions to
be satisfied before Shares may be purchased, including the dates on which Shares
subject to the Option may first be purchased. The Administrator may specify that
an Option may not be exercised until the completion of the service period
specified at the time of grant. (Any such period is referred to herein as the
"waiting period.") At the time an Option is granted, the Administrator shall fix
the period within which the Option may be exercised, which shall not be earlier
than the end of the waiting period, if any, nor, in the case of an Incentive
Stock Option, later than ten (10) years, from the date of grant.
(iii) Form of Payment. The consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of:
-8-
<PAGE> 9
(1) cash;
(2) check;
(3) promissory note;
(4) other Shares which (1) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six months on the date of surrender, and (2) have a Fair Market Value
on the date of surrender not greater than the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(5) delivery of a properly executed exercise
notice together with such other documentation as the Administrator and the
broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price;
(6) any combination of the foregoing methods
of payment; or
(7) such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.
(iv) Special Incentive Stock Option Provisions. In
addition to the foregoing, Options granted under the Plan which are intended to
be Incentive Stock Options under Section 422 of the Code shall be subject to the
following terms and conditions:
(1) Dollar Limitation. To the extent that the
aggregate Fair Market Value of (a) the Shares with respect to which Options
designated as Incentive Stock Options plus (b) the shares of stock of the
Company, Parent and any Subsidiary with respect to which other incentive stock
options are exercisable for the first time by an Optionee during any calendar
year under all plans of the Company and any Parent and Subsidiary exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of the preceding sentence, (a) Options shall be taken into account in
the order in which they were granted, and (b) the Fair Market Value of the
Shares shall be determined as of the time the Option or other incentive stock
option is granted.
(2) 10% Stockholder. If any Optionee to whom
an Incentive Stock Option is to be granted pursuant to the provisions of the
Plan is, on the date of grant, the owner of Common Stock (as determined under
Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary
of the Company, then the following special provisions shall be applicable to the
Option granted to such individual:
(a) The per Share Option price of Shares
subject to such Incentive Stock Option shall not be less than 110% of the Fair
Market Value of Common Stock on the date of grant; and
(b) The Option shall not have a term in
excess of five (5) years from the date of grant. Except as modified by the
preceding provisions of this subsection 7(a)(iv) and except as otherwise limited
by Section 422 of the Code, all of the provisions of the Plan shall be
applicable to the Incentive Stock Options granted hereunder.
-9-
<PAGE> 10
(v) Other Provisions. Each Option granted under the
Plan may contain such other terms, provisions, and conditions not inconsistent
with the Plan as may be determined by the Administrator.
(vi) Buyout Provisions. The Administrator may at any
time offer to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.
(b) SARs.
(i) In Connection with Options. At the sole
discretion of the Administrator, SARs may be granted in connection with all or
any part of an Option, either concurrently with the grant of the Option or at
any time thereafter during the term of the Option. The following provisions
apply to SARs that are granted in connection with Options:
(1) The SAR shall entitle the Optionee to
exercise the SAR by surrendering to the Company unexercised a portion of the
related Option. The Optionee shall receive in Exchange from the Company an
amount equal to the excess of (1) the Fair Market Value on the date of exercise
of the SAR of the Common Stock covered by the surrendered portion of the related
Option over (2) the exercise price of the Common Stock covered by the
surrendered portion of the related Option. Notwithstanding the foregoing, the
Administrator may place limits on the amount that may be paid upon exercise of
an SAR; provided, however, that such limit shall not restrict the exercisability
of the related Option.
-10-
<PAGE> 11
(2) When an SAR is exercised, the related
Option, to the extent surrendered, shall cease to be exercisable.
(3) An SAR shall be exercisable only when and
to the extent that the related Option is exercisable and shall expire no later
than the date on which the related Option expires.
(4) An SAR may only be exercised at a time
when the Fair Market Value of the Common Stock covered by the related Option
exceeds the exercise price of the Common Stock covered by the related Option.
(ii) Independent of Options. At the sole discretion of
the Administrator, SARs may be granted without related Options. The following
provisions apply to SARs that are not granted in connection with Options:
(1) The SAR shall entitle the Optionee, by
exercising the SAR, to receive from the Company an amount equal to the excess of
(1) the Fair Market Value of the Common Stock covered by the exercised portion
of the SAR, as of the date of such exercise, over (2) the Fair Market Value of
the Common Stock covered by the exercised portion of the SAR, as of the last
market trading date prior to the date on which the SAR was granted; provided,
however, that the Administrator may place limits on the aggregate amount that
may be paid upon exercise of an SAR.
(2) SARs shall be exercisable, in whole or in
part, at such times as the Administrator shall specify in the Optionee's SAR
agreement.
(iii) Form of Payment. The Company's obligation arising
upon the exercise of an SAR may be paid in Common Stock or in cash, or in any
combination of Common Stock and cash, as the Administrator, in its sole
discretion, may determine. Shares issued upon the exercise of an SAR shall be
valued at their Fair Market Value as of the date of exercise.
(c) Performance-Based Compensation Limitations. No Employee
shall be granted, in any fiscal year of the Company, Options or SARs to receive
more than 500,000 Shares of Common Stock, provided that the Company may make an
additional one-time grant of up to 1,000,000 Shares to newly-hired Employees.
The foregoing limitations shall adjust proportionately in connection with any
change in the Company's recapitalization as described in Section 11(a).
(d) Method of Exercise.
(i) Procedure for Exercise; Rights as a Stockholder.
Any Option or SAR granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator and as shall be permissible
under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option or SAR shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option or SAR by the person entitled to exercise the Option or
SAR and full payment for the Shares with respect to which the Option is
exercised has been received by the Company. Full payment may, as authorized by
the Administrator (and, in the case of an Incentive Stock Option, determined at
the time of grant) and permitted by the Option Agreement consist of any
consideration and method of payment allowable under subsection 7(a)(iii) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
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 stock
certificate is issued, except as provided in Section 11 of the Plan.
-11-
<PAGE> 12
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter shall be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised. Exercise of an SAR in any manner shall, to the
extent the SAR is exercised, result in a decrease in the number of Shares which
thereafter shall be available for purposes of the Plan, and the SAR shall cease
to be exercisable to the extent it has been exercised.
(ii) Rule 16b-3. Options and SARs granted to
individuals subject to Section 16 of the Exchange Act ("Insiders") must comply
with the applicable provisions of Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(iii) Termination of Employment or Consulting
Relationship. In the event an Optionee's Continuous Status as an Employee or
Consultant terminates (other than upon the Optionee's death or Disability), the
Optionee may exercise his or her Option or SAR, but only within such period of
time as is determined by the Administrator at the time of grant, not to exceed
six (6) months (three (3) months in the case of an Incentive Stock Option) from
the date of such termination, and only to the extent that the Optionee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of the term of such Option or SAR as set forth in the Option
or SAR Agreement). To the extent that Optionee was not entitled to exercise an
Option or SAR at the date of such termination, and to the extent that the
-12-
<PAGE> 13
Optionee does not exercise such Option or SAR (to the extent otherwise so
entitled) within the time specified herein, the Option or SAR shall terminate.
(iv) Disability of Optionee. In the event an
Optionee's Continuous Status as an Employee or Consultant terminates as a result
of the Optionee's Disability, the Optionee may exercise his or her Option or
SAR, but only within twelve (12) months from the date of such termination, and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of the term of such
Option or SAR as set forth in the Option or SAR Agreement). To the extent that
Optionee was not entitled to exercise an Option or SAR at the date of such
termination, and to the extent that the Optionee does not exercise such Option
or SAR (to the extent otherwise so entitled) within the time specified herein,
the Option or SAR shall terminate.
(v) Death of Optionee. In the event of an Optionee's
death, the Optionee's estate or a person who acquired the right to exercise the
deceased Optionee's Option or SAR by bequest or inheritance may exercise the
Option or SAR, but only within twelve (12) months following the date of death,
and only to the extent that the Optionee was entitled to exercise it at the date
of death (but in no event later than the expiration of the term of such Option
or SAR as set forth in the Option or SAR Agreement). To the extent that Optionee
was not entitled to exercise an Option or SAR at the date of death, and to the
extent that the Optionee's estate or a person who acquired the right to exercise
such Option does not exercise such Option or SAR (to the extent otherwise so
entitled) within the time specified herein, the Option or SAR shall terminate.
8. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that the offeree shall be entitled
to purchase, the price to be paid, and the time within which the offeree must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(d) Rule 16b-3. Stock Purchase Rights granted to Insiders, and
Shares purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
-13-
<PAGE> 14
(e) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 11
of the Plan.
(f) Withholding Taxes. In accordance with any applicable
administrative guidelines it establishes, the Committee may allow a purchaser to
pay the amount of taxes required by law to be withheld as a result of a purchase
of Shares or a lapse of restrictions in connection with Shares purchased
pursuant to a Stock Purchase Right, by withholding from any payment of Common
Stock due as a result of such purchase or lapse of restrictions, or by
permitting the purchaser to deliver to the Company, Shares having a Fair Market
Value, as determined by the Committee, equal to the amount of such required
withholding taxes.
9. Long-Term Performance Awards.
(a) Administration. Long-Term Performance Awards are cash or
stock bonus awards that may be granted either alone or in addition to other
awards granted under the Plan. Such awards shall be granted for no cash
consideration. The Administrator shall determine the nature, length and starting
date of any performance period (the "Performance Period") for each Long-Term
Performance Award, and shall determine the performance or employment factors, if
any, to be used in the determination of Long-Term Performance Awards and the
extent to which such Long-Term Performance Awards are valued or have been
earned. Long-Term Performance Awards may vary from participant to participant
and between groups of participants and shall be based upon the achievement of
Company, Subsidiary, Parent and/or individual
-14-
<PAGE> 15
performance factors or upon such other criteria as the Administrator may deem
appropriate. Performance Periods may overlap and participants may participate
simultaneously with respect to Long-Term Performance Awards that are subject to
different Performance Periods and different performance factors and criteria.
Long-Term Performance Awards shall be confirmed by, and be subject to the terms
of, a Long-Term Performance Award agreement. The terms of such awards need not
be the same with respect to each participant.
At the beginning of each Performance Period, the Administrator
may determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
(b) Adjustment of Awards. The Administrator may adjust the
performance factors applicable to the Long-Term Performance Awards to take into
account changes in legal, accounting and tax rules and to make such adjustments
as the Administrator deems necessary or appropriate to reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships.
10. Non-Transferability of Options. Options and Rights may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization, Dissolution, Merger,
Asset Sale or Change of Control.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option or Right as to all or any part of the Optioned Stock, including
Shares as to which the Option or Right would not otherwise be exercisable.
-15-
<PAGE> 16
(c) Merger or Asset Sale. Subject to the provisions of
paragraph (d) hereof, in the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Right shall be assumed or an equivalent
Option or Right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume the Option or to substitute an equivalent
option, the Administrator shall, in lieu of such assumption or substitution,
provide for the Optionee to have the right to exercise the Option or Right as to
all or a portion of the Optioned Stock, including Shares as to which it would
not otherwise be exercisable. If the Administrator makes an Option or Right
exercisable in lieu of assump tion or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee that the Option or
Right shall be exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or Right will terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or Right shall be
considered assumed if, immediately following the merger or sale of assets, the
Option or Right confers the right to purchase, for each Share of Optioned Stock
subject to the Option or Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation and the participant, provide for the
consideration to be received upon the exercise of the Option or Right, for each
Share of Optioned Stock subject to the Option or Right, to be solely common
stock of the successor corporation or its Parent equal in Fair Market Value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.
(d) Change in Control. In the event of a "Change in Control"
of the Company, as defined in paragraph (e) below, then the following
acceleration and valuation provisions shall apply:
-16-
<PAGE> 17
(i) Except as otherwise determined by the Board, in
its discretion, prior to the occurrence of a Change in Control, any Options and
Rights outstanding on the date such Change in Control is determined to have
occurred that are not yet exercisable and vested on such date shall become fully
exercisable and vested;
(ii) Except as otherwise determined by the Board, in
its discretion, prior to the occurrence of a Change in Control, all outstanding
Options and Rights, to the extent they are exercisable and vested (including
Options and Rights that shall become exercisable and vested pursuant to
subparagraph (i) above), shall be terminated in exchange for a cash payment
equal to the Change in Control Price, (reduced by the exercise price, if any,
applicable to such Options or Rights). These cash proceeds shall be paid to the
Optionee or, in the event of death of an Optionee prior to payment, to the
estate of the Optionee or to a person who acquired the right to exercise the
Option or Right by bequest or inheritance.
(e) Definition of "Change in Control". For purposes of this
Section 11, a "Change in Control" means the happening of any of the following:
(i) When any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a
Subsidiary or a Company employee benefit plan, including any trustee of such
plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities entitled to vote generally in the
election of directors; or
(ii) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or
(iii) A change in the composition of the Board of
Directors of the Company, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean directors
who either (A) are directors of the Company as of the date the Plan is approved
by the stockholders, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).
(f) Change in Control Price. For purposes of this Section 11,
"Change in Control Price" shall be, as determined by the Board, (i) the highest
Fair Market Value of a Share within the 60-day period immediately preceding the
date of determination of the Change in Control Price by the Board (the "60-Day
Period"), or (ii) the highest price paid or offered per Share, as determined by
the Board, in any bona fide transaction or bona fide offer related to the Change
in Control of the Company, at any time within the 60-Day Period, or (iii) such
lower price as the Board, in its discretion, determines to be a reasonable
estimate of the fair market value of a Share.
12. Date of Grant. The date of grant of an Option or Right shall be,
for all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
-17-
<PAGE> 18
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.
14. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Right unless the exercise of such Option or Right
and the issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements
-18-
<PAGE> 19
of any stock exchange or quotation system upon which the Shares may then be
listed or quoted, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise
of an Option or Right, the Company may require the person exercising such Option
or Right to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
15. Liability of Company.
(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Right exceeds, as of the date of grant, the number of
Shares which may be issued under the Plan without additional stockholder
approval, such Option or Right shall be void with respect to such excess
Optioned Stock, unless stockholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 13(b) of the Plan.
16. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
17. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.
-19-
<PAGE> 20
NOVELL, INC. 1991 STOCK PLAN
NONSTATUTORY STOCK OPTION
EXERCISE NOTICE
Novell, Inc.
Attention: Shareholder Services Department
1. Exercise of Option. Effective as of today, , 199 ,
the undersigned ("Purchaser") hereby elects to purchase
shares (the "Shares") of the Common Stock of Novell, Inc. (the "Company") under
and pursuant to the Novell, Inc. 1991 Stock Plan (the "Plan") and the Stock
Option Agreement dated (the "Option Agreement").
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the Shares and any and all required taxes.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Subject to the terms and conditions of this
Agreement, Purchaser shall have all of the rights of a stockholder of the
Company with respect to the Shares from and after the date the stock certificate
evidencing such Shares is issued, as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company.
5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse
tax consequences as a result of Purchaser's purchase or disposition of the
Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. 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 Purchaser with
respect to the subject matter hereof, and such agreement is governed by Delaware
law except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by: NOVELL, INC.
By:
- ---------------------------------- ----------------------------
Signature of Purchaser
Title:
- ---------------------------------- -------------------------
Printed Name
- ----------------------------------
Social Security Number
Mailing Address:
- ----------------------------------
- ----------------------------------
<PAGE> 21
NOVELL, INC. 1991 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Novell, Inc.
1991 Stock Plan (the "Plan") shall have the same defined meanings in this Option
Agreement.
I. NOTICE OF STOCK OPTION GRANT
Employee ID:
----------------------
Name:
----------------------
Address:
----------------------
----------------------
----------------------
----------------------
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number:
---------------------------
Date of Grant:
---------------------------
Exercise Price per Share:
---------------------------
Total Number of Shares Granted:
---------------------------
Type of Option:
---------------------------
Term/Expiration Date:
---------------------------
Vesting Schedule: This Option will vest over four (4) years with 25%
vesting one year from grant date and thereafter 6.25% per quarter.
Termination Period: This Option may be exercised for 60 days after
termination of Optionee's employment or consulting relationship, or such
longer period as may be applicable upon death or Disability of Optionee
as provided in the Plan, but in no event later than the Term/Expiration
Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares set forth in the Notice of Grant at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Novell, Inc. 1991 Stock Plan, which is incorporated herein by
reference. Subject to Section 13(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Option Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive Stock Option under Section 422 of
the Code.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its term
in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, Disability or other termination of Optionee's employment or
consulting relationship, the exercisability of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.
<PAGE> 22
(b) Method of Exercise. This Option is exercisable by delivery of
an exercise notice in the form attached as Exhibit A (the "Exercise Notice")
which shall state the election to exercise the Option, the number of Shares as
to which the Option is being exercised (the "Exercised Shares") and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Shareholder Services
Department of the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price and any required
withholding tax.
No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with all relevant provisions of law and the
requirements of any stock exchange upon which the Shares are then listed.
Assuming such compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
(b) check; or
(c) delivery of a properly executed Exercise Notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price; or
(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii)have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Term of Option. This Option will expire ten (10) years from the date
of its grant.
6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.
(a) Exercising the Option.
(i) Nonqualified Stock Option ("NSO"). If this Option
does not qualify as an ISO, the Optionee may incur regular federal income tax
liability upon exercise. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Exercised Shares on the date of exercise
over their aggregate Exercise Price. If the Optionee is an employee or a former
employee, the Company will be required to withhold from his or her compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.
(ii) Incentive Stock Option ("ISO"). If this Option
qualifies as an ISO, the Optionee will have no regular federal income tax
liability upon its exercise, although the excess, if any, of the fair market
value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject the Optionee to alternative minimum tax
in the year of exercise.
-2-
<PAGE> 23
(b) Disposition of Shares.
(i) NSO. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the fair market value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. It is agreed that this Option Agreement shall be
interpreted and construed in accordance with the laws of that jurisdiction in
which enforcement is sought. Should any portion of this Agreement be judicially
held to be invalid, unenforceable or void, such holding shall not have the
effect of invalidating the remainder of this Agreement or any other part
thereof, the parties hereby agreeing that the portion so held to be invalid,
unenforceable, or void shall, if possible, be deemed amended or reduced in
scope. This Option Agreement shall supersede the terms of any prior agreement or
understanding between Optionee and the Company regarding the subject matter
hereof, and constitutes the full and entire understanding and agreement between
Optionee and the Company regarding the subject matter hereof. This Option
Agreement may be modified or amended only in writing signed by an officer of the
Company and by Optionee. Optionee agrees and acknowledges the Company's "at
will" employment policy, which is that the Company reserves the right to
discontinue Optionee's employment at any time for any reason or no reason
without notice, and that the Company accords Optionee the right to discontinue
employment at any time for any reason or no reason without notice. The Company
agrees and acknowledges that it's "at will" employment policy may not be
enforceable in the jurisdiction in which Optionee is domiciled. Optionee agrees
that nothing in this Agreement shall be construed as a limitation of the rights
of the Company to terminate Optionee's employment with the Company at any time
for any reason or no reason without notice.
OPTIONEE: NOVELL, INC.:
By:
- ---------------------------------- ---------------------------------
Signature David R. Bradford
Title: Sr. V.P., General Counsel
- ---------------------------------- & Corporate Secretary
Print Name
Mailing Address:
- ----------------------------------
- ----------------------------------
- ----------------------------------
-3-
<PAGE> 1
EXHIBIT 5.2
May 29, 1996
Novell, Inc.
1555 North Technology Way
Orem, UT 84057
RE: POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (File No. 33-48395)
filed by you with the Securities and Exchange Commission (the "Commission") on
June 5, 1992 and Post- Effective Amendment No. 1 thereto to be filed by you with
the Commission on or about May 29, 1996 (the "Registration Statement"), in
connection with, inter alia, the registration under the Securities Act of 1933,
as amended, of 1,316,602 shares of your Common Stock (the "Shares") for issuance
under the Novell, Inc. 1989 Employee Stock Purchase Plan (the "Purchase Plan").
As your legal counsel, we have examined the proceedings taken by you in
connection with the sale and issuance of the Shares under the Purchase Plan.
We have been advised by the Assistant Secretary of Novell, Inc. (the
"Company") as follows:
1. On July 14, 1989, at a meeting duly called and held and at which a
quorum was present and acting throughout, the Board of Directors of the Company
(the "Board") adopted the Novell, Inc. 1989 Employee Stock Purchase Plan and
reserved 4,000,000 shares of stock for issuance thereunder (as adjusted for
subsequent stock splits). The adoption of the Purchase Plan and the reservation
of such shares for issuance thereunder was approved by a majority vote of the
stockholders of the Company at the Annual Meeting of Stockholders held on March
14, 1990, which meeting was duly called and at which a quorum was present.
2. On November 18, 1994, at a meeting duly called and held and at which a
quorum was present and acting throughout, the Board approved an amendment to the
Purchase Plan to increase the number of shares reserved for issuance thereunder
to 8,000,000. The increase in the number of shares reserved for issuance under
the Purchase Plan was approved by a majority vote of the stockholders of the
Company at the Annual Meeting of Stockholders held on April 12, 1995, which
meeting was duly called and at which a quorum was present.
Based upon and in reliance on the foregoing, it is our opinion that, when
issued and sold after April 12, 1995 in the manner referred to in the Purchase
Plan and pursuant to the agreements that accompany the Purchase Plan, the Shares
will be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, as amended, and further consent to the use of our name wherever
appearing in the Amended Registration Statement, including any Prospectus
constituting a part thereof, and any amendments thereto.
Sincerely yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
