<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. 1997 NON-STATUTORY STOCK OPTION 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
Maximum Proposed Maximum
Title of Amount Offering Aggregate Amount of
Securities to To Be Price Offering Price Registration
Be Registered Registered Per Share (1) Fee
- -----------------------------------------------------------------------------
Common Stock
(par value $0.10 per share)
- To be issued upon
exercise of options
granted under the
Novell, Inc. 1997
Non-Statutory Stock
Option Plan 1,250,000 $8.562500 $10,703,125 $3,157.42
============================================================================
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee on the basis of the exercise price of outstanding
options as permitted under paragraph (h) of Rule 457 (weighted average
exercise price of $8.5625 per share).
</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 followng 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 1997 Non-Statutory Stock Option
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
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.
</PAGE>
<PAGE>
Item 8. Exhibits.
---------
Number Document
- ---------- -----------------------------------
4.1 Novell, Inc. 1997 Non-Statutory Stock Option Plan, together with
Stock Option Agreement and Exercise Notice.
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
</PAGE>
<PAGE>
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.
</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>
<TABLE> POWER OF ATTORNEY
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, August 18, 1998
- ----------------------- President, Chief Executive Officer
Eric E. Schmidt and Director (Principal Executive Officer)
/s/ Dennis R. Raney Senior Vice President and Chief August 18, 1998
- ----------------------- Financial Officer (Principal
Dennis R. Raney Financial Officer and Principal
Accounting Officer)
Vice Chairman of the Board August 18, 1998
- ----------------------- and Director
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
/s/ Reed E. Hundt 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
Director August 18, 1998
- -------------------------
Larry W. Sonsini
</TABLE>
</PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- --------- ------------------------------------------------------------
4.1 Novell, Inc. 1997 Non-Statutory Stock Option Plan,together with
Stock Option Agreement and Exercise Notice.
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.
1997 NON-STATUTORY STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Non-Statutory Stock Option
Plan is to promote the success of the Company's business by providing for the
grant of an option to the Chief Executive Officer of the Company as inducement
essential to his entering into an employment agreement with the Company.
The Option granted under the Plan will be a Non-statutory Stock Option.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws
of any jurisdiction where an Option is granted under the Plan.
(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 of Directors appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock 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 to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved
by the Company or (ii) transfers between locations of the Company or between
the Company, its Parent, any Subsidiary, or any successor. 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>
<PAGE>
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "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 Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock 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;
(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.
(n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(o) "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.
(p) "Option" means a nonstatutory stock option granted pursuant to the
Plan, that is not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated thereunder.
(q) "Option Agreement" means an 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.
(r) "Option Exchange Program" means a program whereby an outstanding
option is surrendered in exchange for an option with a lower exercise price.
(s) "Optioned Stock" means the Common Stock subject to an Option.
(t) "Optionee" means the holder of an outstanding Option granted under
the Plan.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1997 Non-Statutory Stock Option Plan.
(w) "Service Provider" means an Employee including an Officer,
Consultant or Director.
</PAGE>
<PAGE>
(x) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.
(y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,250,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).
4. Administration of the Plan.
(a) The Plan shall be administered by (i) the Board or (ii) a
Committee, which committee shall be constituted to satisfy Applicable Laws.
(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;
(ii) to determine whether and to what extent Options are granted
hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) 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 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 the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
</PAGE>
<PAGE>
(ix) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
(x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or previously
granted by the Administrator;
(xi) to determine the terms and restrictions applicable to
Options;
(xii) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal
to the amount required to be withheld. The Fair Market Value of the Shares
to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and
(xiii) 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.
5. Eligibility. Options may be granted to Service Providers.
6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as
a Service Provider with the Company, nor shall they interfere in any way with
the Optionee's right or the Company's right to terminate such relationship
at any time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for ten (10) years, unless
sooner terminated under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before
the Option may be exercised.
(c) Form of onsideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. Such consideration may consist entirely of:
(i) cash;
</PAGE>
<PAGE>
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) 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 (B) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or
(viii) any combination of the foregoing methods of payment.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement. An Option may not be exercised for a
fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company), 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. The Company shall issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter 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.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his
</PAGE>
<PAGE>
Option, but only within such period of time as is specified in the Option
Agreement, and only to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his Option within the
time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise
his Option within such period of time as is specified in the Option Agreement,
to the extent the Option is vested on the date of termination (but in no vent
later than the expiration of the term of such Option as set forth in the
Option Agreement). If, on the date of termination, the Optionee is not vested
as to his entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. If, at the time of death, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
imediately revert to the Plan. The Option may be exercised by the executor
or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of
descent or distribution. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(e) 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.
11. Transferability of Options. Unless determined otherwise by the
Administrator to the contrary, an Option 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. The Administrator may, in
the manner established by the Administrator, provide for the transfer,
without payment of consideration, of an Option by the Optionee to any member
of the Optionee's immediate family or to a trust or a partnership whose
beneficiaries are members of the Optionee's immediate family. In such case,
the Option shall be exercisable only by such transferee. Following such
transfer, any such Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer. For
purposes of this section, an Optionee's "immediate family" shall mean
the Optionee's spouse, children and grandchildren.
12. 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
</PAGE>
<PAGE>
Company, the number of shares of Common Stock covered by each outstanding
Option, and the number of shares of Common Stock which have been authorized
for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock
covered by each such outstanding Option, 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.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee
to have the right to exercise his or her Option until ten (10) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option shall lapse as
to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.
(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 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 refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option shall
be fully vested and exercisable for a period of fifteen (15) days from the
date of such notice, and the Option shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned
Stock, 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 is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock 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.
</PAGE>
<PAGE>
(d) Change in Control. In the event of a "Change in Control" of the
Company, the term and conditions of Optionee's employment agreement, if any,
shall govern the acceleration of vesting of Optionee's outstanding Options, if
any. A "Change in Control" shall be deemed to have occurred if: (i) the
Company sells or otherwise disposes of all or substantially all of its
assets; (ii) there is a merger, consolidation or any other corporate
reorganization of the Company with any other corporation or corporations or
any other entity or person (or a related series of such transactions),
provided that the stockholders of the Company, as a group, do not hold,
immediately after such event, at least 50% of the voting power of the
surviving or successor corporation; or (iii) any person or entity,
including any "person" as such term is used in Section 13(d)(3) of the
Exchange Act, becomes the "beneficial owner" (as defined in the Exchange Act)
of Common Stock of the Company representing 40% or more of the combined voting
power of the voting securities of the Company.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, 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.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) 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.
Termination of the Plan shall not affect the Administrator's ability to
exercise the powers granted to it hereunder with respect to options granted
under the Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws 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 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.
16. 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.
</PAGE>
<PAGE>
17. 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.
</PAGE>
<PAGE>
NOVELL, INC.
1997 NON-STATUTORY STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
Optionee: Name
Address
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
Vesting Commencement Date
Exercise Price per Share
Total Number of Shares Granted
Total Exercise Price
Type of Option: Non-statutory Stock Option
Term/Expiration Date:
Vesting Schedule:
Subject to accelerated vesting as specified in Optionee's employment
agreement with the Company (the "Employment Agreement") and in Section II.2 of
this Option Agreement, this Option shall vest and become exercisable in
accordance with the following schedule:
20% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/60th of the Shares subject to the Option
shall vest each month thereafter, so as to be 100% vested five years following
the date of grant, conditioned upon Optionee remaining a Service Provider on
such vesting dates.
</PAGE>
<PAGE>
Termination Period:
This Option may be exercised for sixty days after Optionee ceases to be a
Service Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for twelve months in accordance with the applicable
provisions of the Plan and this Agreement. In no event shall this Option be
exercised 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, as
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 Plan, which is incorporated herein by reference. Subject to
Section 14(b) 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.
2. Exercise of Option.
(a) Right to Exercise.
(i) Subject to subsections 2(a)(ii) and 2(a)(iii) below, this
Option shall be 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.
(ii) In the event of Optionee's death, Disability,
Constructive Termination (as defined below) or termination by the Company
other than for Cause (as defined below), Optionee shall have the right to
exercise the Option as to Shares that would have vested within one year after
the date of termination, if any, in addition to the Shares, if any, that have
vested according to the Vesting Schedule set forth in the Notice of Grant.
For purposes of this Section, "Constructive Termination" shall mean
that the Optionee has terminated employment with the Company or its affiliated
entities because, although the Company has not terminated the Optionee's
employment involuntarily, either the Optionee's position, annual base salary
or responsibilities have been significantly reduced. For purposes of this
Section, a reduction of twenty percent (20%) or morein Optionee's annual base
salary in effect immediately prior to such reduction will be deemed to be a
significant reduction. A reduction in the Optionee's annual base salary that
is part of an overall reduction in compensation also applied to other senior
executives of the Company as a result of decreased business performance by the
Company or one of its business units shall not
constitute a Constructive Termination.
For purposes of this section, "Cause" shall mean the occurrence of
any of the following: (1) Optionee's continued violations of Optionee's
obligations to perform the duties and responsibilities normally required of an
individual holding Optionee's job title which are demonstrably willful or
deliberate on Optionee's part after there has been delivered to Optionee a
written demand for performance from the Company which describes the basis for
the Company's belief that Optionee has not substantially performed his duties;
(2) Optionee's engaging in willful misconduct which is materially injurious to
the Company or its affiliates; (3) Optionee's committing a felony, an act of
fraud against or
</PAGE>
<PAGE>
the misappropriation of property belonging to the Company or its affiliates;
or (4) Optionee's willful breaching, in any material respect, the terms
of Optionee's employment agreement or any confidentiality or proprietary
information agreement between Optionee and the Company.
(iii) This Option may not be exercised for a fraction of
a Share.
(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 in
respect of 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
completed by the Optionee and delivered to the Stockholders' Services
Department. 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.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. 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) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; 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; or
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 may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
</PAGE>
<PAGE>
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. The Optionee may incur regular federal
income tax liability upon exercise of an NSO. 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 in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(b) Disposition of Shares. 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.
7. Entire Agreement; Governing Law. The Plan and the Employment Agreement
are incorporated herein by reference. The Plan, Employment Agreement and
this Option Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.
This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.
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, the Employment Agreement and this Option
Agreement. Optionee has reviewed the Plan, the Employment Agreement 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, the Employment Agreement and this
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. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE: NOVELL, INC.
______________________________ __________________________________
Optionee Signature By
</PAGE>
<PAGE>
Address:
_____________________________________ Title_______________________________
_____________________________________
Exhibit A of Exhibit 4.1
1997 NON-STATUTORY STOCK OPTION PLAN
EXERCISE NOTICE
Novell, Inc.
122 East 1700 South
Provo, Utah 84606
Attention: Shareholder Services Department
1. Exercise of Option. Effective as of today,_______________,______, the
undersigned ("Purchaser") hereby elects to purchase ________ shares (the
"Shares") of the Common Stock of Novell, Inc. (the "Company") under and
pursuant to the 1997 Non-Statutory Stock Option Plan (the "Plan") and the
Stock Option Agreement dated _____________________ (the "Option Agreement") .
The purchase price for the shares shall be $_________, as required by the
Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the shares.
3. Representation 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. 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 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. The Shares so acquired
shall be issued to the Optionee as soon as practicable after 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 of issuance, except as provided in
Section 12 of the Plan.
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 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 with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except
by means of a writing signed by
</PAGE>
<PAGE>
the Company and Purchaser. This agreement is governed by the international
substantive laws, but not the choice of law rules, of California.
Submitted by: Accepted by:
PURCHASER NOVELL, INC.
____________________________ ____________________________
Optionee By
-----------------------------
Title
_____________________________
Date Received
Address: Address:
______________________________ 122 East 1700 South
Provo, Utah 84606
- ------------------------------
</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. 1997 Non-Statutory Stock Option 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 1,250,000 shares of the Company's
Common Stock (the "Shares") reserved for issuance under the Novell, Inc. 1997
Non-Statutory Stock Option 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, the Shares, when issued and sold in the manner
referred to in the Plan and the agreements that accompany the Plan, and in
accordance with the Company's Restated Certificate of Incorporation, 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 thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
/S/WILSON, SONSINI, GOODRICH & ROSATI, P.C.
</PAGE>
<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 1997 Non-Statutory Stock Option Plan of Novell,
Inc. of our report dated November 24, 1997, with (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
San Jose, California
August 18, 1998
</PAGE>
