<PAGE>
As filed with the Securities and Exchange Commission on August 24, 1998
Registration No. 333-_______
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
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
incorporation or organization) Identification Number)
122 East 1700 South
Provo, UT 84606
(Address, including zip code, of
Registrant's principal executive offices)
NOVELL, INC. 1989 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
David R. Bradford, Esq.
Senior Vice President, General
Counsel and Corporate Secretary
NOVELL, INC.
1555 North Technology Way
Orem, UT 84057
(801) 222-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------------------------------
COPIES TO:
Aaron J. Alter, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
(650)-493-9300
============================================================================
</PAGE>
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
==============================================================================
<S> <C> <C> <C> <C>
Proposed Proposed Amount of
Title of Amount Maximum Maximum Registration
Securities to To Be Offering Price Aggregate Fee
Be Registered Registered Per Share Offering Price
- -----------------------------------------------------------------------------
Common Stock
(par value $0.10 per share)
- To be issued upon
exercise of options
granted under the
Novell, Inc. 1989
Employee Stock
Purchase Plan 6,000,000 $9.058025(1) $ 54,348,150(1) $16,032.60
==============================================================================
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c), based on 85% of the average of the
high and low prices reported in the Nasdaq National Market System on August
20, 1998, which average was $9.058025.
</TABLE>
</PAGE>
<PAGE> 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 31,
1997, filed pursuant to Section 13(a) of the Exchange Act.
3. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
January 31, 1998 and April 30, 1998, 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 this 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 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
125,000 shares of Registrant's Common Stock.
</PAGE>
<PAGE>
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Section 145 of the Delaware General Corporation Law authorizes a court to
toward, 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 which
require the Registrant 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.
</PAGE>
<PAGE>
Item 8. Exhibits.
---------
Number Document
- ------ --------------------------------------
4.1 Novell, Inc. 1989 Employee Stock Purchase together with forms of
Subscription Agreement and Withdrawl Agreement thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
as to the legality of the securities being registered.
23.1 Consent of Independent Auditors (Ernst & Young LLP) (see page II-7).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6).
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 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
</PAGE>
<PAGE>
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.
</PAGE>
<PAGE>
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 August 18, 1998.
NOVELL, INC.
By: /s/ Eric E. Schmidt
------------------------------
Eric E. Schmidt
Chairman of the Board, President,
Chief Executive Officer and Director
</PAGE>
<PAGE> POWER OF ATTORNEY
<TABLE>
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Eric E. Schmidt 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.
<S> <C> <C>
Signature Title Date
- ---------------------------- ------------------------ ---------------------
/s/ Eric E. Schmidt Chairman of the Board,
- ---------------------------- President, Chief Executive August 18, 1998
Eric E. Schmidt Officer and Director
(Principal Executive Officer)
/s/ Dennis R. Raney Senior Vice President
- ---------------------------- and Chief Financial August 18, 1998
Dennis R. Raney Officer (Principal Financial
Officer and Principal Accounting Officer)
Vice Chairman of the Board
- ---------------------------- and Director August 18, 1998
John A. Young
/s/ Elaine R. Bond Director August 18, 1998
- ----------------------------
Elaine R. Bond
/s/ Hans-Werner Hector Director August 18, 1998
- -----------------------------
Hans-Werner Hector
Director August 18, 1998
- -----------------------------
Reed E. Hundt
/s/ William N. Joy Director August 18, 1998
- -----------------------------
William N. Joy
/s/ Jack L. Messman Director August 18, 1998
- ------------------------------
Jack L. Messman
/s/ Larry W. Sonsini Director August 18, 1998
- -------------------------------
Larry W. Sonsini
</TABLE>
</PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- --------- -------------------------------------------------------------------
4.1 Novell, Inc. 1989 Employee Stock Purchase Plan, together
with forms of Subscription agreement and Withdrawal
Agreement thereunder.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, as to the legality of the
securities being registered.
23.1 Consent of Independent Auditors (Ernst & Young LLP) (see
page II-7).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6).
</PAGE>
<PAGE> Exhibit 4.1
NOVELL, INC.
1989 EMPLOYEE STOCK PURCHASE PLAN
(As amended April 7, 1998)
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.
(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.
</PAGE>
<PAGE>
(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.
(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
</PAGE>
<PAGE>
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.
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
</PAGE>
<PAGE>
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 18,000,000 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.
(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
</PAGE>
<PAGE>
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 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
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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 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.
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<PAGE>
EXHIBIT A OF Exhibit 4.1
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 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
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<PAGE>
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
</PAGE>
<PAGE
EXHIBIT B of Exhibit 4.1
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
</PAGE>
<PAGE>
EXHIBIT 5.1
-----------
Wilson, Sonsini, Goodrich and Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
August 18, 1998
Novell, Inc.
122 East 1700 South
Provo, Utah, 84606
Re: Novell, Inc. 1989 Employee Stock Purchase Plan
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
Novell, Inc. (the Company ) with the Securities and Exchange Commission on or
about August 24, 1998, in connection with the registration under the
Securities Act of 1933, as amended, of an additional 6,000,000 shares of the
Company's Common Stock (the "Shares") reserved for issuance under the Novell,
Inc. 1989 Employee Stock Purchase Plan (the "Plan"). We have examined the
proceedings taken and are familiar with the proceedings proposed to be taken
by the Company in connection with the sale and issuance of the Shares.
It is our opinion that when issued and sold in the manner referred to in the
Plan and pursuant to the respective agreement that accompanies each grant
under the 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 and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments to it.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/WILSON SONSINI GOODRICH & ROSATI, P.C.
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<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1989 Employee Stock Purchase Plan of Novell, Inc.
of
our report dated November 24, 1997, with respect to the consolidated
financial statements of Novell, Inc. incorporated by reference in the Annual
Report (Form 10-K) for the year ended October 31, 1997 and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
/S/ERNST&YOUNG LLP
ERNST & YOUNG LLP
San Jose, California
August 18, 1998
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