<PAGE>

                                                                  EXHIBIT 10.14


                                    AGREEMENT

        This Agreement ("Agreement") is made by and between Novell, Inc. (the
"Company"), and Eric E. Schmidt ("Consultant").

        WHEREAS, Consultant was employed by the Company as President and Chief
Executive Officer and acts as Chairman of the Company's Board of Directors (the
"Board") pursuant to the terms and conditions of a key employment agreement
entered into by and between Consultant and the Company as of March 18, 1997 (the
"Employment Agreement");

        WHEREAS, Consultant has terminated as President and Chief Executive
Officer of the Company effective as of July 10, 2001;

        WHEREAS, Consultant is entitled to certain benefits under the Employment
Agreement as a result of his "Constructive Termination" thereunder;

        WHEREAS, in accordance with the terms of the Employment Agreement, the
Company wishes to continue to retain Consultant as Chairman of the Board. The
Company desires that Consultant remain a special consultant to the Company for a
period of at least twelve months following his termination as President and
Chief Executive Officer;

        WHEREAS, Consultant is willing to accept the benefits and compensation
offered by the Company under the terms and conditions set forth in this
Agreement and Consultant specifically agrees and acknowledges that the
compensation set forth herein, excluding the accelerated vesting referenced
below, satisfies the severance payments that Consultant is entitled to under the
terms and conditions of the Employment Agreement;

        WHEREAS, Consultant is willing to accept the accelerated vesting of any
unvested shares subject to his stock options that would have expired after June
10, 2002 under the terms and conditions set forth in this Agreement as
consideration for the mutual promises made herein;

        NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Consultant (collectively referred to as "the Parties") hereby agree
as follows:

        1. Termination.

           (a) Termination Date. Consultant's employment with the Company as
President and Chief Executive Officer terminated on July 10, 2001 (the
"Termination Date"). Notwithstanding Consultant's employment termination,
Consultant continues to serve as Chairman of the Board and as a special
consultant to the Company. Consultant agrees and acknowledges that although he
will continue to be Chairman of the Board following the Termination Date, he
will relinquish all other officer and director positions with the Company and
its affiliates (except as set forth in Section 2).



                                       19
<PAGE>

           (b) Payment. The Company agrees to pay Consultant the lump sum amount
of $64,326.00, (which amount represents all unreimbursed business expenses and
accrued but unpaid salary and vacation as of the Termination Date) less
applicable withholding, within ten (10) days from the "Effective Date" (as
defined herein) of this Agreement. In addition, the Company agrees to pay
Consultant at the rate of $100,000 per month (which amount represents
Consultant's monthly "Base Salary" and "Target Bonus" as such terms are defined
in the Employment Agreement), less applicable withholding, for the time period
from the Termination Date through the twelve (12) month anniversary of the
Termination Date (the "Payment Period") in accordance with the Company's payroll
practices, whether or not Consultant continues to provide services to the
Company in any capacity during the Payment Period. Notwithstanding the
foregoing, such monthly payments shall be offset by any payment that Consultant
received from the Company after July 10, 2001 and prior to the commencement of
the monthly payments set forth in this Section. Consultant shall also be
entitled to receive an amount equal to the cost of COBRA continuation until the
earlier of (i) the date Consultant is no longer eligible to receive continuation
coverage pursuant to COBRA, or (ii) the end of the Payment Period. During the
Payment Period, Consultant will not be entitled to accrual of any employee
benefits, including, but not limited to, participation in the Company's benefit
plans and programs, accrual of vacation benefits, new stock option or restricted
stock grants, participation in any Company option repricings or exchanges,
401(k) contributions or bonuses. Absent a prior written agreement, Consultant
will not be entitled to any additional salary and bonus payments following the
conclusion of the Payment Period.

           (c) Restricted Stock. As of the Termination Date, the Company's right
to repurchase any shares of restricted stock purchased by Consultant (the
"Restricted Stock") shall lapse as to all unvested shares subject to such
Restricted Stock as set forth on Exhibit A hereto. Except as otherwise provided
in this Agreement, such accelerated shares shall continue to be subject to the
terms and conditions of the applicable Company stock plan and restricted stock
purchase agreements by and between Consultant and the Company. Such shares of
Restricted Stock are now duly authorized, legally issued, fully paid, and
nonassessable shares of the Company's common stock.

        2. Chairman and Consulting Arrangement.

           (a) Chairman/Member of the Board. Following the Termination Date,
Consultant will serve as Chairman of the Board or solely a member of the Board
for such period of time as determined by the Board and/or stockholders.
Consultant agrees and acknowledges that his continued service as either Chairman
of the Board or solely a member of the Board will be subject to any required
Board and stockholder approval.

           (b) Consultancy. The Company will retain Consultant as a special
consultant following his service as a member of the Board for a minimum period
of twelve calendar months or such longer period of time as determined by the
Board (the "Consulting Term"). Consultant will report directly to the President
and Chief Executive Officer of the Company during the Consulting Term and will
render such business and professional services as shall reasonably be assigned
to him by the Board or the President and Chief Executive Officer of the Company,
including, but not limited to, advising the President and Chief Executive
Officer of the Company and the Board on strategic issues and representing the
Company at various trade conferences as a speaker and promoter of the Company's
products and solutions. Notwithstanding the foregoing, the Consulting Term may
be



                                                                            -2-
<PAGE>

terminated by the Company at any time with or without cause or notice with
thirty (30) days written notice to Consultant.

           (c) Stock Options. As of the Termination Date, the vesting and
exercisability of any stock options granted to Consultant by the Company (the
"Options") shall accelerate as to all unvested shares subject to such Options as
set forth on Exhibit A hereto. Such accelerated options shall remain exercisable
until the earlier of: (i) the term/expiration date of the Options, or (iii) at
least sixty (60) days following the date that Consultant no longer serves as a
member of the Board or as a consultant to the Company. Except as otherwise
provided in this Agreement, the Options shall continue to be subject to the
terms and conditions of the applicable Company stock plan and option agreements
by and between Consultant and the Company.

           (d) Use of Company Aircraft. While a member of the Board or a
consultant to the Company, Consultant shall be permitted to use, for business
purposes only, the Company's corporate aircraft and pilot for up to four to six
business-related trips per year; provided, however, that such use shall be
subject to the Company's policies and aircraft usage requirements and shall be
contingent upon the Company continuing to own the aircraft. Any usage of the
aircraft by the Consultant must be approved in advance and in writing by the
Company's President and Chief Executive Officer and must not interfere with any
other usage of the aircraft by the Company.

        3. Confidential Information. Consultant shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company.
Consultant agrees at all times during the term of his employment and/or
consultancy hereunder and thereafter, to hold in strictest confidence, and not
to use, except for the benefit of the Company, to fulfill his employment
obligations, or to disclose to any person, firm or corporation without written
authorization of the Board of Directors of the Company, any "Confidential
Information" of the Company. Consultant understands that "Confidential
Information" means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customer lists and customers (including, but not limited to,
customers of the Company on whom Consultant called or with whom Consultant
became acquainted during the term of his employment), markets, software,
developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing, finances or other
business information disclosed to Consultant by the Company either directly or
indirectly in writing, orally or by drawings or observation of parts or
equipment. Consultant further understands that Confidential Information does not
include any of the foregoing items which has become publicly known and made
generally available through no wrongful act of Consultant or of others who were
under confidentiality obligations as to the item or items involved. Consultant
agrees that, at the end of the Consulting Term, Consultant will deliver to the
Company (and will not keep in his possession, recreate or deliver to anyone
else) any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items developed by Consultant pursuant to his employment and consultancy with
the Company or otherwise belonging to the Company, its successors or assigns.



                                                                            -3-
<PAGE>


        4. Payment of Salary. Consultant acknowledges and represents that except
as provided in Sections 1 and 2 the Company has paid to Consultant all salary,
wages, bonuses, accrued vacation and any and all other benefits due to
Consultant.

        5. Release of Claims. Consultant agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Consultant
by the Company. Consultant, on behalf of himself, and his respective heirs,
family members, executors and assigns, hereby fully and forever releases the
Company and its past, present and future officers, agents, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
parents, predecessor and successor corporations, and assigns, from, and agrees
not to sue or otherwise institute or cause to be instituted any legal or
administrative proceedings concerning any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that he may possess arising from any omissions, acts
or facts that have occurred up until and including the Effective Date of this
Agreement including, without limitation,

           (a) any and all claims relating to or arising from Consultant's
employment relationship with the Company and the termination of that
relationship;

           (b) any and all claims relating to, or arising from, Consultant's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law;

           (c) any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;

           (d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, the California Fair Employment and
Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and
all amendments to each such Act as well as the regulations issued thereunder;

           (e) any and all claims for violation of the federal, or any state,
constitution;

           (f) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and

           (g) any and all claims for attorneys' fees and costs.



                                                                             -4-
<PAGE>

Consultant agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any obligations incurred under this
Agreement.

        6. Acknowledgment of Waiver of Claims under ADEA. Consultant
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Consultant and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Consultant acknowledges
that the consideration given for this waiver and release is in addition to
anything of value to which Consultant was already entitled. Consultant further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21)
days within which to consider this Agreement; (c) he has seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (d) this Agreement shall not be effective until the revocation
period has expired. Any revocation should be in writing and delivered to the
President and Chief Executive Officer at the Company, by close of business on
the seventh (7th) day from the date that Consultant signs this Agreement.

        7. Civil Code Section 1542. Consultant represents that he is not aware
of any claims against the Company other than the claims that are released by
this Agreement. Consultant acknowledges that he has been advised by legal
counsel and is familiar with the provisions of California Civil Code Section
1542, which provides as follows:

                A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                CREDITOR  DOES  NOT  KNOW OR  SUSPECT  TO EXIST IN HIS
                FAVOR AT THE TIME OF EXECUTING  THE RELEASE,  WHICH IF
                KNOWN  BY  HIM  MUST  HAVE  MATERIALLY   AFFECTED  HIS
                SETTLEMENT WITH THE DEBTOR.

           Consultant, being aware of said code section, agrees to expressly
waive any rights he may have thereunder to the extent permitted by applicable
law.

        8. No Pending or Future Lawsuits. Consultant represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Consultant also represents that he does not intend to bring any claims
on his own behalf or on behalf of any other person or entity against the Company
or any other person or entity referred to herein.

        9. Confidentiality. Consultant agrees to use his best efforts to
maintain in confidence the existence of this Agreement, the contents and terms
of this Agreement, and the consideration for this Agreement (hereinafter
collectively referred to as "Settlement Information"). Consultant agrees to take
every reasonable precaution to prevent disclosure of any Settlement Information
to third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Consultant agrees to take
every precaution to disclose Settlement Information only to



                                                                             -5-
<PAGE>

those attorneys, accountants, governmental entities, and family members who have
a reasonable need to know of such Settlement Information.

        10. Covenant Not to Compete and Not to Solicit.

            (a) Consultant shall not for a period of one (1) year following the
Termination Date, directly or indirectly, engage in (whether as employee,
consultant, proprietor, partner, director or otherwise), or have any ownership
interest in, or participate in the financing, operation, management or control
of, any person, firm, corporation or business that is a "Restricted Business"
(as defined below) in a "Restricted Territory" (as defined below) without the
prior written consent of the Company. The following shall not constitute a
violation of this provision: (i) ownership of no more than two percent (2%) of
the outstanding voting stock of a publicly-traded corporation or any stock owned
by Consultant as of March 18, 1997, or (ii) Consultant's acting as a member of
any Board of Directors on which Consultant served as of March 18, 1997.

            For this purpose, "Restricted Business" shall mean: (i) the design,
development, manufacture, marketing or support of local or wide area network
products, computer operating systems, applications products, or any other
software products of the type designed, developed, manufactured, sold or
supported by the Company or as proposed to be designed, developed, manufactured,
sold or supported by the Company pursuant to a development project which is
actually being pursued prior to the end of Consultant's status as a director or
consultant to the Company. For this purpose, "Restricted Territory" shall mean
the counties, cities or states of the United States.

            (b) Following the Termination Date, Consultant shall not for a
period of one (1) year thereafter, (i) hire, solicit, encourage, or take any
other action which is intended to induce any other employee of the Company to
terminate his or her employment with the Company; or (ii) interfere with the
contractual or employment relationship between the Company and any such employee
of the Company. The foregoing shall not prohibit Consultant or any entity with
which Consultant may be affiliated from hiring a former employee of the Company;
provided that such hiring results exclusively from such former employee's
affirmative response to a general recruitment effort.

            (c) The parties intend that the covenants contained in the preceding
paragraphs shall be construed as a series of separate covenants, one for each
county, city and state or other political subdivision of the Restricted
Territory. Except for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenant contained in the preceding paragraphs.
If, in any judicial proceeding, a court shall refuse to enforce any of the
separate covenants (or any part thereof deemed included in said paragraphs),
then such unenforceable covenant (or such part) shall be deemed eliminated from
this Agreement for the purpose of those proceedings to the extent necessary to
permit the remaining separate covenants (or portions thereof) to be enforced.

            (d) In the event that the provisions of this Section should ever be
deemed to exceed the time, scope or geographic limitations permitted by
applicable laws, then such provisions shall be reformed to the maximum time,
scope or geographic limitations, as the case may be, permitted by applicable
laws.



                                                                             -6-
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            (e) Consultant represents that he is familiar with the covenants not
to compete, not to hire and not to solicit, and is fully aware of and
acknowledges his obligations hereunder, including without limitation, the
reasonableness of the length of time and scope of these covenants. Consultant
acknowledges that breach of Consultant's covenants not to compete and not to
solicit in this Section would cause irreparable injury to the Company, and
agrees that in the event of such breach, the Company shall be entitled to seek
injunctive relief under applicable law without the necessity of proving actual
damages.

        11. No Cooperation. Consultant agrees he will not act in any manner that
might damage the business of the Company. Consultant agrees that he will not
counsel or assist any attorneys or their clients in the presentation,
prosecution or litigation of any disputes, differences, grievances, claims,
charges, or complaints by any third party against the Company and/or any
officer, director, employee, agent, representative, shareholder or attorney of
the Company, unless under a subpoena or other court order to do so. Consultant
agrees to notify the Company if he receives a subpoena or court order as
specified above.

        12. Cooperation. Consultant agrees to assist the Company in good faith
in the presentation, prosecution or litigation of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the
Company and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company and to be responsive and cooperative in
such event.

        13. Non-Disparagement. Consultant and the Company mutually agree to
refrain from (i) any defamation, libel or slander of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, or the Consultant, as applicable, or (ii) tortious
interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, or the Consultant, as applicable.

        14. No Admission of Liability. Consultant understands and acknowledges
that this Agreement constitutes a compromise and settlement of disputed claims.
No action taken by the Company, either previously or in connection with this
Agreement shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or admission by
the Company of any fault or liability whatsoever to the Consultant or to any
third party.

        15. Costs. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.

        16. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Consultant upon
Consultant's death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Consultant to receive any form of compensation payable



                                                                             -7-
<PAGE>

pursuant to this Agreement may be assigned or transferred except by will or the
laws of descent and distribution. Any other attempted assignment, transfer,
conveyance or other disposition of Consultant's right to compensation or other
benefits will be null and void.

        17. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, including any potential claims of harassment, discrimination or
wrongful termination shall be subject to binding arbitration, to the extent
permitted by law, in Santa Clara County, California, before the American
Arbitration Association under its National Rules for the Resolution of
Employment Disputes. CONSULTANT AGREES AND HEREBY WAIVES HIS RIGHT TO JURY TRIAL
AS TO MATTERS ARISING OUT OF THE TERMS OF THIS AGREEMENT AND ANY MATTERS HEREIN
RELEASED TO THE EXTENT PERMITTED BY LAW. The Parties agree that the prevailing
party in any arbitration shall be entitled to injunctive relief in any court of
competent jurisdiction to enforce the arbitration award.

        18. Authority. Consultant represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through
him to bind them to the terms and conditions of this Agreement.

        19. No Representations. Consultant represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.

        20. Breach. Consultant agrees and understands that his right to receive
the consideration referenced in this Agreement shall be conditioned upon his
compliance with the terms of this Agreement. Consultant shall forfeit any rights
to such consideration upon his material breach of the terms of this Agreement.
Likewise, the Company agrees and understands that its rights to enforce the
terms in this Agreement shall be conditioned upon its compliance with such
terms. The Company shall forfeit any rights hereunder upon its material breach
of the terms of this Agreement.

        21. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.

        22. Entire Agreement. This Agreement and any agreements incorporated
herein by reference represent the entire agreement and understanding between the
Company and Consultant concerning Consultant's employment separation from the
Company and continued relationship as a consultant to the Company, and satisfies
the severance payments and other obligations concerning Consultant's employment
relationship with the Company and his compensation by the Company under the
terms and conditions of the Employment Agreement.

        23. No Oral Modification. This Agreement may only be amended in writing
signed by Consultant and the President of the Company.

        24. Governing Law. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California.



                                                                             -8-
<PAGE>

        25. Effective Date. This Agreement is effective eight (8) days after it
has been signed by both Parties (the "Effective Date").

        26. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

        27. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

            (a) They have read this Agreement;

            (b) They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice;

            (c) They understand the terms and consequences of this Agreement and
of the releases it contains;

            (d) They are fully aware of the legal and binding effect of this
Agreement.



                                                                             -9-
<PAGE>

        IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.


                                             NOVELL, INC.


Dated: August 13         , 2001              By /S/ ALAN FRIEDMAN
      -------------------                       -------------------------------
                                                Alan Friedman, Senior VP People



                                                ERIC E. SCHMIDT, an individual

Dated: August 13         , 2001                 /S/ ERIC E. SCHMIDT
      -------------------                       -------------------------------
                                                Eric E. Schmidt