Exhibit 4.1

                          NOVELL, INC. 1991 STOCK PLAN
                         (As amended September 24, 1997)



1.       PURPOSE OF THE PLAN. The purpose of the Novell, Inc. 1991 Stock Plan is
         to enable Novell,  Inc. to provide an incentive to eligible  employees,
         consultants and officers whose present and potential  contributions are
         important  to the  continued  success of the  Company,  to afford these
         individuals  the  opportunity to acquire a proprietary  interest in the
         Company,  and to  enable  the  Company  to  enlist  and  retain  in its
         employment the best available talent for the successful  conduct of its
         business. It is intended that this purpose will be effected through the
         granting of (a) stock  options,  (b) stock purchase  rights,  (c) stock
         appreciation rights, and (d) long-term performance awards.

2. DEFINITIONS. As used herein, the following definitions shall apply:

         (a) "ADMINISTRATOR"  means the Board or such of its Committees as shall
         be administering the Plan, in accordance with Section 5 of the Plan.

         (b)  "APPLICABLE  LAWS " means the legal  requirements  relating to the
         administration of stock option plans under applicable  securities laws,
         Delaware corporate law and the Code.

         (c) "BOARD" means the Board of Directors of the Company.

         (d) "CODE" means the Internal Revenue Code of 1986, as amended.

         (e) "COMMITTEE" means a Committee  appointed by the Board in accordance
         with Section 5 of the Plan.

         (f)  "COMMON  STOCK"  means the Common  Stock,  $.10 par value,  of the
         Company.

         (g) "COMPANY" means Novell, Inc., a Delaware corporation.

         (h) "CONSULTANT" means any person,  including a Director or an advisor,
         engaged by the Company or a parent or Subsidiary to render services and
         who is compensated for such services.

         (i)  "CONTINUOUS  STATUS AS AN EMPLOYEE OR  CONSULTANT"  means that the
         employment or consulting  relationship is not interrupted or terminated
         by the  Company,  any  Parent or  Subsidiary.  Continuous  Status as an
         Employee or Consultant shall not be considered  interrupted in the case
         of:

                  (i) any leave of absence approved by the Board, including sick
                  leave, military leave, or any other personal leave;  provided,
                  however,  that for purposes of Incentive  Stock  Options,  any
                  such  leave  may  not   exceed   ninety   (90)  days,   unless
                  reemployment  upon the  expiration of such leave is guaranteed
                  by contract  (including  certain Company policies) or statute;
                  or

                  (ii) transfers between locations of the Company or between the
                  Company, its Parent, its Subsidiaries or its successor.

         (j) "DIRECTOR" means a member of the Board.

         (k)  "DISABILITY"  means total and  permanent  disability as defined in
         Section 22(e)(3) of the Code.

         (l)  "EMPLOYEE"  means any person,  including  Officers and  Directors,
         employed by the  Company or any Parent or  Subsidiary  of the  Company.
         Neither  service as a Director nor payment of a  director's  fee by the
         Company shall be sufficient to constitute "employment" by the Company.

         (m)  "EXCHANGE  ACT"  means the  Securities  Exchange  Act of 1934,  as
         amended.

         (n) "FAIR  MARKET  VALUE"  means,  as of any date,  the value of Common
         Stock determined as follows:

                  (i) If the  Common  Stock is listed on any  established  stock
                  exchange  or  a  national  market  system,  including  without
                  limitation   the  National   Market  System  of  the  National
                  Association of Securities  Dealers,  Inc. Automated  Quotation
                  ("NASDAQ")  System, the Fair Market Value of a Share of Common
                  Stock shall be the closing  sales price for such stock (or the
                  closing  bid,  if no sales  were  reported)  as quoted on such
                  system or exchange (or the exchange  with the greatest  volume
                  of trading in Common  Stock) on the last  market  trading  day
                  prior to the day of  determination,  as  reported  in The Wall
                  Street Journal or such other source as the Administrator deems
                  reliable;

                  (ii) If the Common  Stock is quoted on the NASDAQ  System (but
                  not on the  National  Market  System  thereof) or is regularly
                  quoted by a recognized  securities  dealer but selling  prices
                  are not  reported,  the Fair Market Value of a Share of Common
                  Stock  shall be the mean  between  the high bid and low  asked
                  prices for the Common  Stock on the last  market  trading  day
                  prior to the day of  determination,  as  reported  in The Wall
                  Street Journal or such other source as the Administrator deems
                  reliable;

                  (iii) In the absence of an  established  market for the Common
                  Stock, the Fair Market Value shall be determined in good faith
                  by the Administrator.

         (o) "INCENTIVE  STOCK OPTION" means an Option intended to qualify as an
         incentive  stock  option  within the meaning of Section 422 of the Code
         and the regulations promulgated thereunder.

         (p) "LONG-TERM PERFORMANCE AWARD" means an award under Section 9 below.
         A Long-Term  Performance  Award shall permit the recipient to receive a
         cash  or  stock  bonus  (as  determined  by  the  Administrator)   upon
         satisfaction  of  such  performance  factors  as  are  set  out  in the
         recipient's  individual  grant.  Long-term  Performance  Awards will be
         based upon the  achievement of Company,  Subsidiary  and/or  individual
         performance  factors or upon such other  criteria as the  Administrator
         may deem appropriate.

         (q) "LONG-TERM  PERFORMANCE  AWARD AGREEMENT" means a written agreement
         between the Company and an Optionee evidencing the terms and conditions
         of an  individual  Long-Term  Performance  Award grant.  The  Long-Term
         Performance  Award  Agreement is subject to the terms and conditions of
         the Plan.

         (r)  "NONSTATUTORY  STOCK  OPTION"  means  any  Option  that  is not an
         Incentive Stock Option.

         (s) "NOTICE OF GRANT" means a written notice  evidencing  certain terms
         and conditions of an individual  Option,  Stock Purchase Right,  SAR or
         Long-Term  Performance  Award grant. The Notice of Grant is part of the
         Option Agreement, the SAR Agreement and the Long-Term Performance Award
         Agreement.

         (t)  "OFFICER"  means a person who is an officer of the Company  within
         the  meaning  of  Section  16 of the  Exchange  Act and the  rules  and
         regulations promulgated thereunder.

         (u) "OPTION" means a stock option granted pursuant to the Plan.

         (v) "OPTION  AGREEMENT" means a written  agreement  between the Company
         and an Optionee  evidencing  the terms and  conditions of an individual
         Option  grant.  The  Option  Agreement  is  subject  to the  terms  and
         conditions of the Plan.

         (w)  "OPTION  EXCHANGE  PROGRAM"  means a program  whereby  outstanding
         options are  surrendered  in exchange for options with a lower exercise
         price.

         (x)  "OPTIONED  STOCK" means the Common  Stock  subject to an Option or
         Right.

         (y) "OPTIONEE" means an Employee or Consultant who holds an outstanding
         Option or Right.

         (z)  "PARENT"  means a "parent  corporation,"  whether now or hereafter
         existing, as defined in Section 424(e) of the Code.

         (aa) "PLAN" means this 1991 Stock Plan.

         (bb)  "RESTRICTED  STOCK"  means  shares of Common  Stock  subject to a
         Restricted  Stock Purchase  Agreement  acquired  pursuant to a grant of
         Stock Purchase Rights under Section 8 below.

         (cc) "RESTRICTED STOCK PURCHASE  AGREEMENT" means a written  agreement
         between the Company and the Optionee  evidencing the terms and
         restrictions  applying to stock purchased under a Stock Purchase Right.
         The Restricted Stock Purchase  Agreement is subject to the terms and
         conditions of the Plan and the Notice of Grant.

         (dd) "RIGHT" means and includes SARs, Long-Term  Performance Awards and
         Stock Purchase Rights granted pursuant to the Plan.

         (ee) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor
         rule  thereto,  as in effect when  discretion is being  exercised  with
         respect to the Plan.

         (ff) "SAR" means a stock appreciation right granted pursuant to Section
         7 of the Plan.

         (gg) "SAR AGREEMENT" means a written  agreement between the Company and
         an Optionee  evidencing  the terms and  conditions of an individual SAR
         grant.  The SAR Agreement is subject to the terms and conditions of the
         Plan.

         (hh)  "SHARE"  means  a share  of the  Common  Stock,  as  adjusted  in
         accordance with Section 11 of the Plan.

         (ii) "STOCK  PURCHASE  RIGHT" means the right to purchase Common Stock
         pursuant to Section 8 of the Plan, as evidenced by a Notice of Grant.

         (jj)  "SUBSIDIARY"  means a  "subsidiary  corporation,"  whether now or
         hereafter existing, as defined in Section 424(f) of the Code.

3.       ELIGIBILITY.  Nonstatutory  Stock  Options and Rights may be granted to
         Employees and Consultants.  Incentive Stock Options may be granted only
         to Employees.  If otherwise eligible, an Employee or Consultant who has
         been  granted an Option or Right may be granted  additional  Options or
         Rights.

4.       STOCK SUBJECT TO THE PLAN.  Subject to the  provisions of Section 11 of
         the  Plan,  the  total  number of Shares  reserved  and  available  for
         issuance under the Plan is 80,278,305  Shares,  which include increases
         each  November  1 from and  including  November  1,  1994  through  and
         including  November 1, 1998 by a number of Shares  equal to 2.9% of the
         number of Shares outstanding as of the Company's  immediately preceding
         fiscal year end. The maximum  number of Shares  reserved and  available
         for issuance pursuant to Incentive Stock Options is 20,000,000 Shares.

         Subject  to  Section  11 of the  Plan,  if any  Shares  that  have been
         optioned under an Option cease to be subject to such Option (other than
         through  exercise  of the  Option),  or if any Option or Right  granted
         hereunder is forfeited, or any such award otherwise terminates prior to
         the issuance of Common Stock to the  participant,  the Shares that were
         subject  to  such  Option  or  Right  shall  again  be  available   for
         distribution in connection with future Option or Right grants under the
         Plan.  Shares that have  actually  been issued under the Plan,  whether
         upon exercise of an Option or Right, shall not in any event be returned
         to the Plan and shall not  become  available  for  future  distribution
         under  the  Plan,  except  that  if  Shares  of  Restricted  Stock  are
         repurchased  by the  Company at their  original  purchase  price,  such
         Shares shall become available for future grant under the Plan.

5.  ADMINISTRATION.

         (A) COMPOSITION OF ADMINISTRATOR.

                  (I)  MULTIPLE  ADMINISTRATIVE  BODIES.  The Plan may (but need
                  not) be administered by different  administrative  bodies with
                  respect to (A) Directors who are  employees,  (B) Officers who
                  are not Directors and (C) Employees who are neither  Directors
                  nor Officers.

                  (II)  SECTION  162(M).  To the extent  that the  Administrator
                  determines  it to be  desirable  to qualify  Options or Rights
                  hereunder  as  "performance-based   compensation"  within  the
                  meaning  of  Section  162(m)  of the Code,  the Plan  shall be
                  administered by a Committee of two or more "outside directors"
                  within the meaning of Section 162(m) of the Code.

                  (III)  RULE  16B-3.   To  the  extent   desirable  to  qualify
                  transactions   hereunder  as  exempt  under  Rule  16b-3,  the
                  transactions  contemplated  hereunder  shall be  structured to
                  satisfy the requirements for exemption under Rule 16b-3.

                  (IV) OTHER  ADMINISTRATION.  Other than as provided above, the
                  Plan  shall  be  administered  by  (A)  the  Board  or  (B)  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, in
                  accordance with Section 2(n) of the Plan;

                  (ii) to select the  Consultants  and Employees to whom Options
                  and Rights may be granted hereunder;

                  (iii) to  determine  whether  and to what  extent  Options and
                  Rights or any combination thereof, are granted hereunder;

                  (iv) to  determine  the number of shares of Common Stock to be
                  covered by each Option and Right granted hereunder;

                  (v) to approve forms of agreement for use under the Plan;

                  (vi) to determine the terms and conditions,  not  inconsistent
                  with the terms of the Plan,  of any award  granted  hereunder.
                  Such terms and conditions include, but are not limited to, the
                  exercise  price,  the time or times when Options or Rights may
                  be exercised (which may be based on performance criteria), any
                  vesting acceleration or waiver of forfeiture restrictions, and
                  any restriction or limitation regarding any Option or Right or
                  the shares of Common  Stock  relating  thereto,  based in each
                  case  on  such  factors  as the  Administrator,  in  its  sole
                  discretion, shall determine;

                  (vii) to construe and interpret the terms of the Plan;

                  (viii) to prescribe,  amend and rescind rules and  regulations
                   relating to the Plan;

                  (ix) to  determine  whether  and under what  circumstances  an
                  Option or Right may be settled in cash instead of Common Stock
                  or Common Stock instead of cash;

                  (x) to reduce the exercise price of any Option or Right;

                  (xi) to  modify or amend  each  Option  or Right  (subject  to
                  Section 13 of the Plan);

                  (xii) to  authorize  any  person to  execute  on behalf of the
                  Company  any  instrument  required  to effect  the grant of an
                  Option or Right previously granted by the Administrator;

                  (xiii) to institute an Option Exchange Program;

                  (xiv) to determine  the terms and  restrictions  applicable to
                  Options and Rights and any Restricted Stock; and

                  (xv) to make all  other  determinations  deemed  necessary  or
                  advisable for administering the Plan.

         (C) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's  decisions,
         determinations  and  interpretations  shall be final and binding on all
         Optionees and any other holders of Options or Rights.

6.       DURATION OF THE PLAN. The Plan shall remain in effect until  terminated
         by the Board under the terms of the Plan, provided that in no event may
         Incentive  Stock  Options be granted under the Plan later than 10 years
         from the date the Plan was adopted by the Board.

7.  OPTIONS AND SARS.

         (A) OPTIONS. The Administrator, in its discretion, may grant Options to
         eligible participants and shall determine whether such Options shall be
         Incentive  Stock Options or  Nonstatutory  Stock  Options.  Each Option
         shall be evidenced by a Notice of Grant which shall expressly  identify
         the  Options  as  Incentive  Stock  Options  or as  Nonstatutory  Stock
         Options,  and be in  such  form  and  contain  such  provisions  as the
         Administrator  shall  from  time  to  time  deem  appropriate.  Without
         limiting the foregoing, the Administrator may at any time authorize the
         Company,  with the consent of the respective  recipients,  to issue new
         Options or Rights in exchange for the  surrender  and  cancellation  of
         outstanding  Options or Rights.  Option  agreements  shall  contain the
         following terms and conditions:

                  (I) EXERCISE PRICE;  NUMBER OF SHARES.  The per Share exercise
                  price for the Shares  issuable  pursuant to an Option shall be
                  such price as is  determined by the  Administrator;  provided,
                  however,  that in the case of an Incentive  Stock Option,  the
                  price shall be no less than 100% of the Fair  Market  Value of
                  the Common Stock on the date the Option is granted, subject to
                  any additional conditions set out in Section 7(a)(iv) below.

                  The  Notice of Grant  shall  specify  the  number of Shares to
                  which it pertains.

                  (II) WAITING PERIOD AND EXERCISE  DATES. At the time an Option
                  is granted,  the  Administrator  will  determine the terms and
                  conditions  to be satisfied  before  Shares may be  purchased,
                  including the dates on which Shares  subject to the Option may
                  first be  purchased.  The  Administrator  may specify  that an
                  Option  may  not be  exercised  until  the  completion  of the
                  service  period  specified  at the time of  grant.  (Any  such
                  period is referred to herein as the "waiting  period.") At the
                  time an Option is  granted,  the  Administrator  shall fix the
                  period within which the Option may be  exercised,  which shall
                  not be earlier  than the end of the  waiting  period,  if any,
                  nor, in the case of an Incentive Stock Option,  later than ten
                  (10) years, from the date of grant.

                  (III) FORM OF PAYMENT.  The  consideration  to be paid for the
                  Shares to be issued upon exercise of an Option,  including the
                  method of payment,  shall be determined  by the  Administrator
                  (and,  in the  case of an  Incentive  Stock  Option,  shall be
                  determined at the time of grant) and may consist entirely of:

                           (1) cash;

                           (2) check;

                           (3) promissory note;

                           (4)  other  Shares  which  (1) in the case of  Shares
                           acquired upon exercise of an option,  have been owned
                           by the  Optionee for more than six months on the date
                           of surrender, and (2) have a Fair Market Value on the
                           date of  surrender  not  greater  than the  aggregate
                           exercise  price of the Shares as to which said Option
                           shall be exercised;

                           (5) delivery of a properly  executed  exercise notice
                           together  with  such  other   documentation   as  the
                           Administrator  and the broker,  if applicable,  shall
                           require  to  effect an  exercise  of the  Option  and
                           delivery to the Company of the sale or loan  proceeds
                           required to pay the exercise price;

                           (6) any combination of the foregoing methods of
                           payment; or

                           (7) such  other  consideration  and method of payment
                           for the issuance of Shares to the extent permitted by
                           Applicable Laws.

                  (IV) SPECIAL INCENTIVE STOCK OPTION PROVISIONS. In addition to
                  the  foregoing,  Options  granted  under  the Plan  which  are
                  intended to be Incentive  Stock  Options  under Section 422 of
                  the  Code  shall  be  subject  to  the  following   terms  and
                  conditions:

                           (1)  DOLLAR  LIMITATION.   To  the  extent  that  the
                           aggregate  Fair  Market  Value of (a) the Shares with
                           respect  to which  Options  designated  as  Incentive
                           Stock  Options  plus (b) the  shares  of stock of the
                           Company,  Parent and any  Subsidiary  with respect to
                           which other  incentive  stock options are exercisable
                           for the first time by an Optionee during any calendar
                           year  under all plans of the  Company  and any Parent
                           and Subsidiary  exceeds $100,000,  such Options shall
                           be  treated  as  Nonstatutory   Stock  Options.   For
                           purposes of the preceding sentence, (a) Options shall
                           be taken into account in the order in which they were
                           granted,  and (b) the Fair Market Value of the Shares
                           shall be  determined  as of the time  the  Option  or
                           other incentive stock option is granted.

                           (2)  10%  STOCKHOLDER.  If any  Optionee  to  whom an
                           Incentive  Stock Option is to be granted  pursuant to
                           the  provisions of the Plan is, on the date of grant,
                           the  owner  of  Common  Stock  (as  determined  under
                           Section 424(d) of the Code)  possessing more than 10%
                           of the total combined  voting power of all classes of
                           stock of the Company or any Parent or  Subsidiary  of
                           the Company,  then the following  special  provisions
                           shall be  applicable  to the  Option  granted to such
                           individual:

                                    (A) The per  Share  Option  price of  Shares
                                    subject to such Incentive Stock Option shall
                                    not be less  than  110% of the  Fair  Market
                                    Value of Common  Stock on the date of grant;
                                    and

                                    (B)  The  Option  shall  not  have a term in
                                    excess of five (5) years from the date of
                                    grant.

                                    Except   as   modified   by  the   preceding
                                    provisions of this  subsection  7(a)(iv) and
                                    except as  otherwise  limited by Section 422
                                    of the Code,  all of the  provisions  of the
                                    Plan shall be  applicable  to the  Incentive
                                    Stock Options granted hereunder.

                  (V) Other  Provisions.  Each Option granted under the Plan may
                  contain  such other  terms,  provisions,  and  conditions  not
                  inconsistent  with  the  Plan  as  may  be  determined  by the
                  Administrator.

                  (VI)  Buyout  Provisions.  The  Administrator  may at any time
                  offer to buy out for a payment  in cash or  Shares,  an Option
                  previously granted,  based on such terms and conditions as the
                  Administrator  shall establish and communicate to the Optionee
                  at the time that such offer is made.

         (B) SARS.

                  (I) IN CONNECTION WITH OPTIONS.  At the sole discretion of the
                  Administrator,  SARs may be granted in connection  with all or
                  any part of an Option,  either  concurrently with the grant of
                  the  Option or at any time  thereafter  during the term of the
                  Option.  The  following  provisions  apply  to SARs  that  are
                  granted in connection with Options:

                           (1) The SAR shall  entitle  the  Optionee to exercise
                           the SAR by surrendering to the Company  unexercised a
                           portion of the related  Option.  The  Optionee  shall
                           receive in Exchange  from the Company an amount equal
                           to the  excess  of (1) the Fair  Market  Value on the
                           date  of  exercise  of the  SAR of the  Common  Stock
                           covered by the  surrendered  portion  of the  related
                           Option  over (2) the  exercise  price  of the  Common
                           Stock  covered  by  the  surrendered  portion  of the
                           related Option.  Notwithstanding  the foregoing,  the
                           Administrator may place limits on the amount that may
                           be paid upon exercise of an SAR;  PROVIDED,  however,
                           that such limit shall not restrict the exercisability
                           of the related Option.

                           (2) When an SAR is exercised,  the related Option, to
                           the   extent   surrendered,   shall   cease   to   be
                           exercisable.

                           (3) An SAR shall be exercisable  only when and to the
                           extent that the  related  Option is  exercisable  and
                           shall  expire  no later  than  the date on which  the
                           related Option expires.

                           (4) An SAR may only be  exercised  at a time when the
                           Fair Market Value of the Common Stock  covered by the
                           related  Option  exceeds  the  exercise  price of the
                           Common Stock covered by the related Option.

                  (II)  INDEPENDENT  OF OPTIONS.  At the sole  discretion of the
                  Administrator,  SARs may be granted without  related  Options.
                  The following provisions apply to SARs that are not granted in
                  connection with Options:

                           (1) The SAR shall entitle the Optionee, by exercising
                           the SAR, to receive  from the Company an amount equal
                           to the  excess  of (1) the Fair  Market  Value of the
                           Common Stock covered by the exercised  portion of the
                           SAR,  as of the date of such  exercise,  over (2) the
                           Fair Market Value of the Common Stock  covered by the
                           exercised  portion of the SAR,  as of the last market
                           trading  date  prior to the date on which the SAR was
                           granted;  provided,  however,  that the Administrator
                           may place limits on the aggregate  amount that may be
                           paid upon exercise of an SAR.

                           (2) SARs shall be  exercisable,  in whole or in part,
                           at such times as the  Administrator  shall specify in
                           the Optionee's SAR agreement.

                  (III) FORM OF PAYMENT.  The Company's  obligation arising upon
                  the exercise of an SAR may be paid in Common Stock or in cash,
                  or in  any  combination  of  Common  Stock  and  cash,  as the
                  Administrator,  in its sole discretion, may determine.  Shares
                  issued  upon the  exercise  of an SAR shall be valued at their
                  Fair Market Value as of the date of exercise.

         (C) PERFORMANCE-BASED  COMPENSATION  LIMITATIONS.  No Employee shall be
         granted, in any fiscal year of the Company,  Options or SARs to receive
         more than 500,000 Shares of Common Stock, provided that the Company may
         make  an  additional  one-time  grant  of up  to  1,000,000  Shares  to
         newly-hired   Employees.   The  foregoing   limitations   shall  adjust
         proportionately   in  connection  with  any  change  in  the  Company's
         recapitalization as described in Section 11(a).

         (D) METHOD OF EXERCISE.

                  (I)  PROCEDURE  FOR  EXERCISE;  RIGHTS AS A  STOCKHOLDER.  Any
                  Option or SAR granted  hereunder  shall be exercisable at such
                  times  and  under  such   conditions   as  determined  by  the
                  Administrator  and as shall be permissible  under the terms of
                  the Plan.

                  An Option may not be exercised for a fraction of a Share.

                  An Option or SAR shall be deemed to be exercised  when written
                  notice  of such  exercise  has been  given to the  Company  in
                  accordance  with the terms of the  Option or SAR by the person
                  entitled  to exercise  the Option or SAR and full  payment for
                  the Shares with respect to which the Option is  exercised  has
                  been received by the Company.  Full payment may, as authorized
                  by the  Administrator  (and, in the case of an Incentive Stock
                  Option,  determined at the time of grant) and permitted by the
                  Option Agreement  consist of any  consideration  and method of
                  payment  allowable  under  subsection  7(a)(iii)  of the Plan.
                  Until the issuance (as evidenced by the  appropriate  entry on
                  the  books of the  Company  or of a duly  authorized  transfer
                  agent of the Company) of the stock certificate evidencing such
                  Shares,  no right to vote or  receive  dividends  or any other
                  rights  as a  stockholder  shall  exist  with  respect  to the
                  Optioned Stock, notwithstanding the exercise of the Option. No
                  adjustment  will be made for a  dividend  or other  right  for
                  which  the  record  date  is  prior  to  the  date  the  stock
                  certificate is issued, except as provided in Section 11 of the
                  Plan.

                  Exercise of an Option in any manner shall result in a decrease
                  in the number of Shares which  thereafter  shall be available,
                  both for  purposes  of the Plan and for sale under the Option,
                  by the number of Shares as to which the Option is exercised.

                  (II) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.  In
                  the event an  Optionee's  Continuous  Status as an Employee or
                  Consultant terminates (other than upon the Optionee's death or
                  Disability),  the  Optionee  may exercise his or her Option or
                  SAR, but only within such period of time as is  determined  by
                  the  Administrator at the time of grant, not to exceed six (6)
                  months  (three  (3) months in the case of an  Incentive  Stock
                  Option)  from  the date of such  termination,  and only to the
                  extent that the  Optionee  was  entitled to exercise it at the
                  date of such  termination  (but in no  event  later  than  the
                  expiration  of the term of such  Option or SAR as set forth in
                  the Option or SAR Agreement).  To the extent that Optionee was
                  not  entitled to exercise an Option or SAR at the date of such
                  termination,  and to the  extent  that the  Optionee  does not
                  exercise  such  Option  or SAR (to  the  extent  otherwise  so
                  entitled) within the time specified herein,  the Option or SAR
                  shall terminate.

                  (III)  DISABILITY  OF  OPTIONEE.  In the  event an  Optionee's
                  Continuous Status as an Employee or Consultant terminates as a
                  result of the Optionee's Disability, the Optionee may exercise
                  his or her Option or SAR,  but only within  twelve (12) months
                  from the date of such termination, and only to the extent that
                  the  Optionee  was entitled to exercise it at the date of such
                  termination  (but in no event later than the expiration of the
                  term of such  Option or SAR as set forth in the  Option or SAR
                  Agreement).  To the extent that  Optionee  was not entitled to
                  exercise an Option or SAR at the date of such termination, and
                  to the extent that the Optionee  does not exercise such Option
                  or SAR (to the extent  otherwise so entitled)  within the time
                  specified herein, the Option or SAR shall terminate.

                  (IV) DEATH OF OPTIONEE.  In the event of an Optionee's  death,
                  the  Optionee's  estate or a person who  acquired the right to
                  exercise the deceased  Optionee's  Option or SAR by bequest or
                  inheritance  may  exercise  the Option or SAR, but only within
                  twelve (12) months  following  the date of death,  and only to
                  the extent that the  Optionee  was  entitled to exercise it at
                  the date of death (but in no event  later than the  expiration
                  of the term of such  Option or SAR as set forth in the  Option
                  or SAR  Agreement).  To  the  extent  that  Optionee  was  not
                  entitled  to  exercise  an Option or SAR at the date of death,
                  and to the extent that the  Optionee's  estate or a person who
                  acquired  the right to exercise  such Option does not exercise
                  such  Option  or SAR (to the  extent  otherwise  so  entitled)
                  within  the time  specified  herein,  the  Option or SAR shall
                  terminate.

8.  STOCK PURCHASE RIGHTS.

         (A) RIGHTS TO  PURCHASE.  Stock  Purchase  Rights may be issued  either
         alone, in addition to, or in tandem with other awards granted under the
         Plan  and/or  cash  awards  made   outside  of  the  Plan.   After  the
         Administrator determines that it will offer Stock Purchase Rights under
         the  Plan,  it shall  advise  the  offeree  in  writing  of the  terms,
         conditions and restrictions related to the offer,  including the number
         of Shares that the offeree shall be entitled to purchase,  the price to
         be paid,  and the time within which the offeree must accept such offer,
         which  shall in no event  exceed  thirty  (30)  days from the date upon
         which  the  Administrator  made the  determination  to grant  the Stock
         Purchase  Right.  The  offer  shall  be  accepted  by  execution  of  a
         Restricted  Stock  Purchase  Agreement  in the form  determined  by the
         Administrator.

         (B) REPURCHASE OPTION.  Unless the Administrator  determines otherwise,
         the  Restricted  Stock  Purchase  Agreement  shall  grant the Company a
         repurchase  option   exercisable  upon  the  voluntary  or  involuntary
         termination  of the  purchaser's  employment  with the  Company for any
         reason  (including death or Disability).  The purchase price for Shares
         repurchased  pursuant to the Restricted Stock purchase  agreement shall
         be the  original  price  paid  by the  purchaser  and  may be  paid  by
         cancellation of any  indebtedness of the purchaser to the Company.  The
         repurchase  option  shall lapse at such rate as the  Administrator  may
         determine.

         (C) OTHER  PROVISIONS.  The Restricted  Stock Purchase  Agreement shall
         contain such other terms,  provisions and  conditions not  inconsistent
         with the Plan as may be  determined  by the  Administrator  in its sole
         discretion.  In addition,  the provisions of Restricted  Stock Purchase
         Agreements need not be the same with respect to each purchaser.

         (D)  RIGHTS  AS  A  STOCKHOLDER.  Once  the  Stock  Purchase  Right  is
         exercised, the purchaser shall have the rights equivalent to those of a
         stockholder,  and shall be a  stockholder  when his or her  purchase is
         entered upon the records of the duly  authorized  transfer agent of the
         Company.  No adjustment  will be made for a dividend or other right for
         which the record date is prior to the date the Stock  Purchase Right is
         exercised, except as provided in Section 11 of the Plan.

         (E) WITHHOLDING TAXES. In accordance with any applicable administrative
         guidelines it  establishes,  the Committee may allow a purchaser to pay
         the amount of taxes  required  by law to be  withheld  as a result of a
         purchase of Shares or a lapse of restrictions in connection with Shares
         purchased  pursuant to a Stock Purchase Right, by withholding  from any
         payment of Common  Stock due as a result of such  purchase  or lapse of
         restrictions, or by permitting the purchaser to deliver to the Company,
         Shares  having a Fair Market Value,  as  determined  by the  Committee,
         equal to the amount of such required withholding taxes.

9.  LONG-TERM PERFORMANCE AWARDS.

         (A)  ADMINISTRATION.  Long-Term  Performance  Awards  are cash or stock
         bonus  awards that may be granted  either alone or in addition to other
         awards granted under the Plan. Such awards shall be granted for no cash
         consideration. The Administrator shall determine the nature, length and
         starting date of any performance period (the "Performance  Period") for
         each Long-Term  Performance  Award, and shall determine the performance
         or  employment  factors,  if any,  to be used in the  determination  of
         Long-Term  Performance  Awards and the  extent to which such  Long-Term
         Performance   Awards  are  valued  or  have  been   earned.   Long-Term
         Performance Awards may vary from participant to participant and between
         groups of  participants  and  shall be based  upon the  achievement  of
         Company,  Subsidiary,  Parent and/or individual  performance factors or
         upon such other  criteria as the  Administrator  may deem  appropriate.
         Performance  Periods  may  overlap  and  participants  may  participate
         simultaneously  with respect to Long-Term  Performance  Awards that are
         subject to  different  Performance  Periods and  different  performance
         factors and criteria.  Long-Term  Performance Awards shall be confirmed
         by,  and be  subject  to the terms of, a  Long-Term  Performance  Award
         agreement.  The terms of such awards need not be the same with  respect
         to each participant.

         At the beginning of each  Performance  Period,  the  Administrator  may
         determine  for  each  Long-Term   Performance  Award  subject  to  such
         Performance  Period  the range of dollar  values or number of shares of
         Common  Stock  to be  awarded  to the  participant  at  the  end of the
         Performance  Period if and to the extent that the relevant  measures of
         performance for such Long-Term  Performance  Award are met. Such dollar
         values or number of shares of Common  Stock may be fixed or may vary in
         accordance with such performance or other criteria as may be determined
         by the Administrator.

         (B) ADJUSTMENT OF AWARDS.  The Administrator may adjust the performance
         factors  applicable  to the Long-Term  Performance  Awards to take into
         account  changes  in legal,  accounting  and tax rules and to make such
         adjustments  as the  Administrator  deems  necessary or  appropriate to
         reflect the  inclusion or exclusion of the impact of  extraordinary  or
         unusual items,  events or  circumstances in order to avoid windfalls or
         hardships.

10.      NON-TRANSFERABILITY  OF  OPTIONS.  Options  and Rights may not be sold,
         pledged,  assigned,  hypothecated,  transferred  or  disposed of in any
         manner other than by will or by the laws of descent or distribution and
         may be  exercised,  during the  lifetime of the  Optionee,  only by the
         Optionee.

11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,  DISSOLUTION, MERGER, ASSET SALE
OR CHANGE OF CONTROL.

         (A) CHANGES IN  CAPITALIZATION.  Subject to any required  action by the
         stockholders  of the  Company,  the  number of  shares of Common  Stock
         covered by each outstanding  Option and Right, and the number of shares
         of Common Stock which have been  authorized for issuance under the Plan
         but as to which no  Options  or Rights  have yet been  granted or which
         have been  returned to the Plan upon  cancellation  or expiration of an
         Option or Right, as well as the price per share of Common Stock covered
         by each such  outstanding  Option or  Right,  shall be  proportionately
         adjusted for any increase or decrease in the number of issued shares of
         Common Stock resulting from a stock split,  reverse stock split,  stock
         dividend,  combination or  reclassification of the Common Stock, or any
         other  increase or  decrease  in the number of issued  shares of Common
         Stock  effected  without  receipt  of  consideration  by  the  Company;
         provided, however, that conversion of any convertible securities of the
         Company shall not be deemed to have been "effected  without  receipt of
         consideration."  Such  adjustment  shall  be made by the  Board,  whose
         determination  in that respect shall be final,  binding and conclusive.
         Except as  expressly  provided  herein,  no  issuance by the Company of
         shares of stock of any class, or securities  convertible into shares of
         stock of any class,  shall affect,  and no adjustment by reason thereof
         shall be made with  respect to, the number or price of shares of Common
         Stock subject to an Option or Right.

         (B)  DISSOLUTION  OR   LIQUIDATION.   In  the  event  of  the  proposed
         dissolution or liquidation of the Company, to the extent that an Option
         or  Right  has  not  been  previously  exercised,   it  will  terminate
         immediately  prior to the  consummation  of such proposed  action.  The
         Board may, in the exercise of its sole  discretion  in such  instances,
         declare that any Option or Right shall  terminate as of a date fixed by
         the Board  and give each  Optionee  the  right to  exercise  his or her
         Option or Right as to all or any part of the Optioned Stock,  including
         Shares  as to  which  the  Option  or  Right  would  not  otherwise  be
         exercisable.

         (C) MERGER OR ASSET SALE.  Subject to the  provisions  of paragraph (d)
         hereof,  in the event of a merger of the Company  with or into  another
         corporation,  or the sale of  substantially  all of the  assets  of the
         Company,  each  outstanding  Option  and Right  shall be  assumed or an
         equivalent Option or Right substituted by the successor  corporation or
         a Parent or Subsidiary of the successor corporation.  In the event that
         the  successor  corporation  does not agree to assume  the Option or to
         substitute an equivalent  option,  the Administrator  shall, in lieu of
         such assumption or  substitution,  provide for the Optionee to have the
         right to  exercise  the  Option or Right as to all or a portion  of the
         Optioned Stock,  including Shares as to which it would not otherwise be
         exercisable.  If the Administrator makes an Option or Right exercisable
         in lieu of assumption or  substitution in the event of a merger or sale
         of assets, the Administrator  shall notify the Optionee that the Option
         or Right shall be  exercisable  for a period of fifteen  (15) days from
         the date of such notice,  and the Option or Right will  terminate  upon
         the expiration of such period. For the purposes of this paragraph,  the
         Option or Right shall be considered assumed if,  immediately  following
         the merger or sale of assets,  the Option or Right confers the right to
         purchase,  for each Share of  Optioned  Stock  subject to the Option or
         Right  immediately  prior  to  the  merger  or  sale  of  assets,   the
         consideration  (whether stock,  cash, or other  securities or property)
         received in the merger or sale of assets by holders of Common Stock for
         each  Share  held  on the  effective  date of the  transaction  (and if
         holders   were  offered  a  choice  of   consideration,   the  type  of
         consideration  chosen by the holders of a majority  of the  outstanding
         Shares); provided,  however, that if such consideration received in the
         merger or sale of assets was not solely  common stock of the  successor
         corporation or its Parent,  the Administrator  may, with the consent of
         the  successor  corporation  and  the  participant,   provide  for  the
         consideration  to be received upon the exercise of the Option or Right,
         for each Share of Optioned Stock subject to the Option or Right,  to be
         solely common stock of the successor corporation or its Parent equal in
         Fair Market Value to the per share consideration received by holders of
         Common Stock in the merger or sale of assets.

         (D) CHANGE IN  CONTROL.  In the event of a "Change in  Control"  of the
         Company,  as  defined  in  paragraph  (e)  below,  then  the  following
         acceleration and valuation provisions shall apply:

                  (I)  Except  as  otherwise  determined  by the  Board,  in its
                  discretion,  prior to the  occurrence  of a Change in Control,
                  any Options and Rights  outstanding on the date such Change in
                  Control  is  determined  to  have  occurred  that  are not yet
                  exercisable  and  vested  on  such  date  shall  become  fully
                  exercisable and vested;

                  (II)  Except as  otherwise  determined  by the  Board,  in its
                  discretion,  prior to the  occurrence  of a Change in Control,
                  all  outstanding  Options and  Rights,  to the extent they are
                  exercisable  and vested  (including  Options  and Rights  that
                  shall become  exercisable  and vested pursuant to subparagraph
                  (i) above), shall be terminated in exchange for a cash payment
                  equal to the Change in Control Price, (reduced by the exercise
                  price,  if any,  applicable to such Options or Rights).  These
                  cash  proceeds  shall be paid to the Optionee or, in the event
                  of death of an Optionee prior to payment, to the estate of the
                  Optionee or to a person who acquired the right to exercise the
                  Option or Right by bequest or inheritance.

         (E) DEFINITION OF "CHANGE IN CONTROL". For purposes of this Section 11,
         a "Change in Control" means the happening of any of the following:

                  (I) When any "person," as such term is used in Sections  13(d)
                  and 14(d) of the  Exchange  Act  (other  than the  Company,  a
                  Subsidiary or a Company employee  benefit plan,  including any
                  trustee of such plan  acting as  trustee)  is or  becomes  the
                  "beneficial  owner"  (as  defined  in  Rule  13d-3  under  the
                  Exchange Act),  directly or  indirectly,  of securities of the
                  Company  representing  fifty  percent  (50%)  or  more  of the
                  combined  voting  power  of  the  Company's  then  outstanding
                  securities  entitled  to vote  generally  in the  election  of
                  directors; or

                  (II) The  stockholders  of the  Company  approve  a merger  or
                  consolidation of the Company with any other corporation, other
                  than a merger  or  consolidation  which  would  result  in the
                  voting securities of the Company outstanding immediately prior
                  thereto   continuing   to   represent   (either  by  remaining
                  outstanding or by being  converted  into voting  securities of
                  the  surviving  entity) at least  fifty  percent  (50%) of the
                  total voting power represented by the voting securities of the
                  Company or such surviving entity outstanding immediately after
                  such  merger  or  consolidation,  or the  stockholders  of the
                  Company  approve an agreement for the sale or  disposition  by
                  the Company of all or substantially  all the Company's assets;
                  or

                  (III) A change in the composition of the Board of Directors of
                  the Company, as a result of which fewer than a majority of the
                  directors are Incumbent Directors. "Incumbent Directors" shall
                  mean  directors who either (A) are directors of the Company as
                  of the date the Plan is approved by the  stockholders,  or (B)
                  are  elected,  or  nominated  for  election,  to the  Board of
                  Directors  of the  Company  with the  affirmative  votes of at
                  least a majority  of the  Incumbent  Directors  at the time of
                  such  election  or  nomination   (but  shall  not  include  an
                  individual  whose election or nomination is in connection with
                  an actual or threatened proxy contest relating to the election
                  of directors to the Company).

         (F) CHANGE IN CONTROL  PRICE.  For purposes of this Section 11, "Change
         in Control Price" shall be, as determined by the Board, (i) the highest
         Fair  Market  Value of a Share  within  the 60-day  period  immediately
         preceding the date of  determination  of the Change in Control Price by
         the Board (the  "60-Day  Period"),  or (ii) the  highest  price paid or
         offered  per  Share,  as  determined  by the  Board,  in any bona  fide
         transaction  or bona fide offer related to the Change in Control of the
         Company,  at any time  within  the 60-Day  Period,  or (iii) such lower
         price as the Board,  in its  discretion,  determines to be a reasonable
         estimate of the fair market value of a Share.

12.      DATE OF GRANT.  The date of grant of an Option or Right  shall be,  for
         all  purposes,   the  date  on  which  the   Administrator   makes  the
         determination  granting such Option or Right,  or such other later date
         as is  determined  by the  Administrator.  Notice of the  determination
         shall be provided to each Optionee  within a reasonable  time after the
         date of such grant.

13.  AMENDMENT AND TERMINATION OF THE PLAN.

         (A) AMENDMENT AND TERMINATION.  The Board may at any time amend, alter,
suspend or terminate the Plan.

         (B) STOCKHOLDER APPROVAL. The Company shall obtain stockholder approval
         of any Plan  amendment to the extent  necessary and desirable to comply
         with Rule 16b-3 or with Section 422 of the Code (or any successor  rule
         or statute or other  applicable law, rule or regulation,  including the
         requirements  of any exchange or  quotation  system on which the Common
         Stock is listed or quoted).  Such  stockholder  approval,  if required,
         shall be  obtained in such a manner and to such a degree as is required
         by the applicable law, rule or regulation.

         (C) EFFECT OF  AMENDMENT  OR  TERMINATION.  No  amendment,  alteration,
         suspension  or  termination  of the Plan shall impair the rights of any
         Optionee, unless mutually agreed otherwise between the Optionee and the
         Administrator,  which  agreement  must be in writing  and signed by the
         Optionee and the Company.

14.  CONDITIONS UPON ISSUANCE OF SHARES.

         (A)  LEGAL  COMPLIANCE.  Shares  shall not be  issued  pursuant  to the
         exercise  of an Option or Right  unless the  exercise of such Option or
         Right and the  issuance  and  delivery of such Shares shall comply with
         all relevant  provisions of law,  including,  without  limitation,  the
         Securities  Act of 1933,  as amended,  the Exchange  Act, the rules and
         regulations   promulgated   thereunder,   Applicable   Laws,   and  the
         requirements  of any stock exchange or quotation  system upon which the
         Shares  may then be listed or quoted,  and shall be further  subject to
         the   approval  of  counsel  for  the  Company  with  respect  to  such
         compliance.

         (B)  INVESTMENT  REPRESENTATIONS.  As a condition to the exercise of an
         Option or Right,  the Company may  require the person  exercising  such
         Option  or  Right  to  represent  and  warrant  at the time of any such
         exercise that the Shares are being  purchased  only for  investment and
         without any present  intention to sell or distribute such Shares if, in
         the  opinion of  counsel  for the  Company,  such a  representation  is
         required.

15.  LIABILITY OF COMPANY.

         (A)  INABILITY  TO OBTAIN  AUTHORITY.  The  inability of the Company to
         obtain  authority from any regulatory body having  jurisdiction,  which
         authority  is deemed by the  Company's  counsel to be  necessary to the
         lawful  issuance and sale of any Shares  hereunder,  shall  relieve the
         Company of any  liability  in  respect of the  failure to issue or sell
         such Shares as to which such  requisite  authority  shall not have been
         obtained.

         (B) GRANTS EXCEEDING  ALLOTTED SHARES. If the Optioned Stock covered by
         an Option or Right  exceeds,  as of the date of  grant,  the  number of
         Shares  which  may  be  issued   under  the  Plan  without   additional
         stockholder  approval,  such Option or Right shall be void with respect
         to such  excess  Optioned  Stock,  unless  stockholder  approval  of an
         amendment  sufficiently  increasing the number of Shares subject to the
         Plan is timely obtained in accordance with Section 13(b) of the Plan.

16.      RESERVATION OF SHARES. The Company,  during the term of this Plan, will
         at all times reserve and keep  available such number of Shares as shall
         be sufficient to satisfy the requirements of the Plan.

17.      STOCKHOLDER  APPROVAL.  Continuance  of the Plan  shall be  subject  to
         approval by the  stockholders  of the Company within twelve (12) months
         before or after the date the Plan is adopted. Such stockholder approval
         shall be  obtained  in the  manner  and to the  degree  required  under
         applicable federal and state law.



<PAGE>


                                                                      -5-

                          NOVELL, INC. 1991 STOCK PLAN
                            NONSTATUTORY STOCK OPTION
                                 EXERCISE NOTICE

Novell, Inc.
Attention:  Shareholder Services Department

     EXERCISE  OF  OPTION.  Effective  as  of  today,  ,  199,  the  undersigned
("Purchaser")  hereby  elects to purchase  shares (the  "Shares")  of the Common
Stock of Novell,  Inc. (the  "Company")  under and pursuant to the Novell,  Inc.
1991 Stock Plan (the "Plan") and the Stock Option  Agreement  dated (the "Option
Agreement").

     DELIVERY OF PAYMENT.  Purchaser  herewith  delivers to the Company the full
purchase price for the Shares and any and all required taxes.

     REPRESENTATIONS  OF PURCHASER.  Purchaser  acknowledges  that Purchaser has
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by and be bound by their terms and conditions.

     RIGHTS  AS  STOCKHOLDER.  Subject  to the  terms  and  conditions  of  this
Agreement,  Purchaser  shall  have all of the  rights  of a  stockholder  of the
Company with respect to the Shares from and after the date the stock certificate
evidencing such Shares is issued,  as evidenced by the appropriate  entry on the
books of the Company or of a duly authorized transfer agent of the Company.

     TAX CONSULTATION.  Purchaser  understands that Purchaser may suffer adverse
tax  consequences  as a result of  Purchaser's  purchase or  disposition  of the
Shares.   Purchaser  represents  that  Purchaser  has  consulted  with  any  tax
consultants  Purchaser  deems  advisable  in  connection  with the  purchase  or
disposition  of the Shares and that  Purchaser is not relying on the Company for
any tax advice.

     ENTIRE  AGREEMENT;  GOVERNING  LAW.  The  Plan  and  Option  Agreement  are
incorporated  herein  by  reference.  This  Agreement,  the Plan and the  Option
Agreement  constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and Purchaser with
respect to the subject matter hereof, and such agreement is governed by Delaware
law except for that body of law pertaining to conflict of laws.

Submitted by:                                                 Accepted by:
                                  NOVELL, INC.

                                                              By:
Signature of Purchaser

                                                              Title:
Printed Name


Social Security Number


Mailing Address:


<PAGE>


                          NOVELL, INC. 1991 STOCK PLAN
                             STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Novell, Inc. 1991
Stock Plan (the  "Plan")  shall have the same  defined  meanings  in this Option
Agreement.

I.  NOTICE OF STOCK OPTION GRANT

         Employee ID:
         Name:
         Address:




         You have  been  granted  an  option  to  purchase  Common  Stock of the
Company,  subject  to the  terms  and  conditions  of the Plan  and this  Option
Agreement, as follows:

         Grant Number:

         Date of Grant:

         Exercise Price per Share:

         Total Number of Shares Granted:

         Type of Option:

         Term/Expiration Date:

         VESTING  SCHEDULE:  This Option  will vest over four (4) years with 25%
         vesting  one year from grant date and  thereafter
         -----------------
         6.25% per quarter.

         TERMINATION  PERIOD:  This  Option may be  exercised  for 60 days after
         termination  of Optionee's  employment or consulting  relationship,  or
         such longer  period as may be  applicable  upon death or  Disability of
         Optionee  as  provided  in the  Plan,  but in no event  later  than the
         Term/Expiration Date as provided above.

II.  AGREEMENT

         1. GRANT OF OPTION. The Plan Administrator of the Company hereby grants
to the  Optionee  named  in the  Notice  of  Grant  attached  as  Part I of this
Agreement  (the  "Optionee")  an option (the "Option") to purchase the number of
Shares  set  forth in the  Notice of Grant at the  exercise  price per share set
forth in the Notice of Grant (the  "Exercise  Price"),  subject to the terms and
conditions of the Novell,  Inc. 1991 Stock Plan, which is incorporated herein by
reference.  Subject  to  Section  13(c) of the Plan,  in the event of a conflict
between the terms and  conditions  of the Plan and the terms and  conditions  of
this Option Agreement, the terms and conditions of the Plan shall prevail.

         If designated in the Notice of Grant as an Incentive Stock Option, this
Option is intended to qualify as an Incentive  Stock Option under Section 422 of
the Code.

         2.  EXERCISE OF OPTION.

                  (a) RIGHT TO EXERCISE.  This Option is exercisable  during its
term in accordance with the Vesting  Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death,  Disability or other  termination of Optionee's  employment or
consulting  relationship,  the  exercisability  of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.

         (b) METHOD OF EXERCISE.  This Option is  exercisable  by delivery of an
exercise notice in the form attached as Exhibit A (the "Exercise  Notice") which
shall  state the  election to  exercise  the Option,  the number of Shares as to
which the Option is being  exercised  (the  "Exercised  Shares")  and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise  Notice shall be signed by the Optionee and
shall be delivered in person or by certified  mail to the  Shareholder  Services
Department of the Company.  The Exercise  Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be  exercised  upon  receipt by the  Company  of such  fully  executed
Exercise  Notice  accompanied by such aggregate  Exercise Price and any required
withholding tax.

         No Shares  shall be issued  pursuant  to the  exercise  of this  Option
unless such issuance and exercise  complies with all relevant  provisions of law
and the  requirements  of any stock  exchange  upon  which the  Shares  are then
listed.  Assuming such compliance,  for income tax purposes the Exercised Shares
shall be  considered  transferred  to the  Optionee  on the date the  Option  is
exercised with respect to such Exercised Shares.

         3. METHOD OF PAYMENT.  Payment of the aggregate Exercise Price shall be
by any of the  following,  or a  combination  thereof,  at the  election  of the
Optionee:

         (a)  cash; or

                  (b)  check; or

         (c) delivery of a properly  executed Exercise Notice together with such
other  documentation as the Administrator  and the broker, if applicable,  shall
require to effect an exercise  of the Option and  delivery to the Company of the
sale or loan proceeds required to pay the exercise price; or

         (d) surrender of other Shares which (I) in the case of Shares  acquired
upon  exercise of an option,  have been owned by the  Optionee for more than six
(6) months on the date of  surrender,  and  (ii)have a Fair Market  Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised Shares.

         4. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner  otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this  Option  Agreement  shall be  binding  upon the  executors,
administrators, heirs, successors and assigns of the Optionee.

         5. TERM OF OPTION. This Option will expire ten (10) years from the date
of its grant.

         6. TAX CONSEQUENCES.  Some of the federal tax consequences  relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE,  AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE  OPTIONEE  SHOULD  CONSULT A TAX ADVISER  BEFORE  EXERCISING  THIS OPTION OR
DISPOSING OF THE SHARES.

         (a)  EXERCISING THE OPTION.

         (I) NONQUALIFIED STOCK OPTION ("NSO").  If this Option does not qualify
as an ISO, the Optionee may incur  regular  federal  income tax  liability  upon
exercise.  The Optionee will be treated as having received  compensation  income
(taxable at ordinary income tax rates) equal to the excess,  if any, of the fair
market  value  of the  Exercised  Shares  on the  date of  exercise  over  their
aggregate  Exercise Price. If the Optionee is an employee or a former  employee,
the Company will be required to withhold from his or her compensation or collect
from Optionee and pay to the applicable taxing  authorities an amount equal to a
percentage of this compensation income at the time of exercise.

         (ii) INCENTIVE  STOCK OPTION  ("ISO").  If this Option  qualifies as an
ISO, the Optionee will have no regular  federal  income tax  liability  upon its
exercise, although the excess, if any, of the fair market value of the Exercised
Shares on the date of  exercise  over  their  aggregate  Exercise  Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to alternative minimum tax in the year of exercise.

         (b) DISPOSITION OF SHARES.

                  (I) NSO.  If the  Optionee  holds NSO  Shares for at least one
year,  any gain  realized  on  disposition  of the  Shares  will be  treated  as
long-term capital gain for federal income tax purposes.

                  (ii) ISO.  If the  Optionee  holds ISO Shares for at least one
year after  exercise  and two years after the grant date,  any gain  realized on
disposition of the Shares will be treated as long-term  capital gain for federal
income tax  purposes.  If the  Optionee  disposes of ISO Shares  within one year
after  exercise  or two years after the grant  date,  any gain  realized on such
disposition  will be treated as compensation  income (taxable at ordinary income
rates) to the extent of the excess,  if any, of the lesser of (A) the difference
between the fair market value of the Shares acquired on the date of exercise and
the aggregate  Exercise Price,  or (B) the difference  between the sale price of
such Shares and the aggregate Exercise Price.

         (c) NOTICE OF DISQUALIFYING  DISPOSITION OF ISO SHARES. If the Optionee
sells or otherwise  disposes of any of the Shares acquired pursuant to an ISO on
or  before  the later of (I) two years  after the grant  date,  or (ii) one year
after the exercise date, the Optionee  shall  immediately  notify the Company in
writing of such  disposition.  The Optionee agrees that he or she may be subject
to income tax withholding by the Company on the compensation  income  recognized
from such  early  disposition  of ISO  Shares by  payment  in cash or out of the
current earnings paid to the Optionee.

         By your  signature and the  signature of the  Company's  representative
below,  you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement.  Optionee has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding,  conclusive and final all decisions
or  interpretations of the Administrator upon any questions relating to the Plan
and  Option  Agreement.  It is  agreed  that  this  Option  Agreement  shall  be
interpreted  and construed in accordance  with the laws of that  jurisdiction in
which enforcement is sought.  Should any portion of this Agreement be judicially
held to be  invalid,  unenforceable  or void,  such  holding  shall not have the
effect of  invalidating  the  remainder  of this  Agreement  or any  other  part
thereof,  the parties  hereby  agreeing  that the portion so held to be invalid,
unenforceable,  or void  shall,  if  possible,  be deemed  amended or reduced in
scope. This Option Agreement shall supersede the terms of any prior agreement or
understanding  between  Optionee and the Company  regarding  the subject  matter
hereof, and constitutes the full and entire  understanding and agreement between
Optionee  and the Company  regarding  the  subject  matter  hereof.  This Option
Agreement may be modified or amended only in writing signed by an officer of the
Company and by Optionee.  Optionee  agrees and  acknowledges  the  Company's "at
will"  employment  policy,  which  is that the  Company  reserves  the  right to
discontinue  Optionee's  employment  at any time  for any  reason  or no  reason
without notice,  and that the Company accords  Optionee the right to discontinue
employment at any time for any reason or no reason without  notice.  The Company
agrees  and  acknowledges  that  it's "at  will"  employment  policy  may not be
enforceable in the jurisdiction in which Optionee is domiciled.  Optionee agrees
that nothing in this Agreement  shall be construed as a limitation of the rights
of the Company to terminate  Optionee's  employment with the Company at any time
for any reason or no reason without notice.

OPTIONEE:                                NOVELL, INC.:


                                                   By:
Signature                                              David R. Bradford

                                                Title: Sr. V.P., General Counsel
Print Name                                              & Corporate Secretary

Mailing Address:

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