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                                                                   EXHIBIT 10.10

                                  NOVELL, INC.
                        SENIOR MANAGEMENT SEVERANCE PLAN

                                    ARTICLE I
                                  INTRODUCTION

        The Novell, Inc. Senior Management Severance Plan (the "Plan") was
established effective April 11, 2000. The purpose of the Plan is to provide
severance benefits to certain eligible senior management employees of Novell,
Inc. (the "Company") whose active employment with the Company is involuntarily
terminated by the Company. This Plan shall supersede any severance benefit plan,
policy or practice previously maintained by the Company with respect to the
employees covered hereby. This Plan amends and restates the Novell, Inc. Senior
Management Severance Plan (effective November 1, 1997).

                                   ARTICLE II

                          DEFINITIONS AND CONSTRUCTION

        Whenever used in the Plan, the following terms shall have the meanings
set forth below.

        A. Base Salary. "Base Salary" shall mean the Participant's gross annual
base salary, exclusive of bonuses, commissions and other incentive pay, as in
effect immediately preceding the Involuntary Termination or Involuntary
Termination Following a Change in Control.

        B. Benefits Continuation Period. "Benefits Continuation Period" shall
mean the period set forth in a Participant's Notice of Participation.

        C. Board. "Board" shall mean the Board of Directors of the Company.

        D. Cause. "Cause" shall mean (i) the Participant's continued violations
of the Participant's obligations which are demonstrably willful or deliberate on
the Participant's part after there has been delivered to the Participant a
written demand for performance from the Company which describes the basis for
the Company's belief that the Participant has not substantially performed his or
her duties, (ii) the Participant's engaging in willful misconduct which is
injurious to the Company or its affiliates, (iii) the Participant's committing a
felony, an act of fraud against or the misappropriation of property belonging to
the Company or its affiliates, (iv) the Participant's breaching, in any material
respect, terms of any confidentiality or proprietary information agreement
between the Participant and the Company, or (v) a determination by the Plan
Administrator that the Participant has committed a material violation of the
Standards of Employee Conduct, which standards may be altered from time to time
by the Company, as defined in the most current version of the Company's Employee
Handbook.

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        E. Change in Control. A "Change in Control" shall be deemed to have
occurred if: (i) Novell sells or otherwise disposes of all or substantially all
of its assets; (ii) there is a merger or consolidation of Novell with any other
corporation or corporations, provided that the shareholders of Novell, as a
group, do not hold, immediately after such event, at least 50% of the voting
power of the surviving or successor corporation; or (iii) any person or entity,
including any "person" as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes the
"beneficial owner" (as defined in the Exchange Act) of Common Stock of Novell
representing 50% or more of the combined voting power of the voting securities
of Novell (exclusive of persons who are now officers or directors of Novell).

        F. COBRA. "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended.

        G. Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.

        H. Company. "Company" shall mean Novell, Inc., any subsidiary
corporations, any successor entities as provided in Article VIII hereof, and any
parent or subsidiaries of such successor entities.

        I. Disability. "Disability" shall mean that the Participant has been
unable to perform his or her duties as an Employee as the result of incapacity
due to physical or mental illness, and such inability, at least twenty-six (26)
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Participant or the Participant's legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least thirty (30) days' written notice
by the Company of its intention to terminate the Participant's employment. In
the event that the Participant resumes the performance of substantially all of
his or her duties hereunder before the termination of his or her employment
becomes effective, the notice of intent to terminate shall automatically be
deemed to have been revoked.

        J. Effective Date. "Effective Date" shall mean April 11, 2000.

        K. Employee. "Employee" shall mean a full-time regular employee of the
Company.

        L. Involuntary Termination. "Involuntary Termination" shall mean (i)
without the Participant's express written consent, a comprehensive and
substantial reduction in all or most of the Participant's primary duties,
authority and responsibilities compared to the Participant's duties, authority
and responsibilities immediately prior to such reduction; (ii) without the
Participant's express written consent, a significant reduction in the
Participant's Base Salary compared to the Participant's Base Salary in effect
immediately prior to such reduction; provided, however, that a reduction in the
Participant's Base Salary of less than twenty percent (20%) or a reduction in
the Participant's Base Salary that is part of an overall reduction in
compensation also applied to other senior executives of the Company as a result
of decreased business performance by the Company or one of its business units,
shall not constitute an Involuntary Termination; (iii) any purported termination
of the Participant by the Company that is not effected for Disability or Cause;
or (iv) the

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failure of the Company to obtain the assumption of this Agreement by any
successors contemplated in Article IX.

        M. Involuntary Termination Following a Change in Control. "Involuntary
Termination Following a Change in Control" shall mean as a direct result of a
Change in Control: (i) without the Participant's express written consent, a
significant reduction of the Participant's duties, position or responsibilities,
or the removal of the Participant from such position and responsibilities,
unless the Participant is provided with a comparable position (i.e., a position
of equal or greater organizational level, duties, authority, compensation and
status); (ii) without the Participant's express written consent, a significant
reduction in the Participant's Base Salary compared to the Participant's Base
Salary in effect immediately prior to such reduction; provided, however, that a
reduction in the Participant's Base Salary of less than twenty percent (20%) or
a reduction in the Participant's Base Salary that is part of an overall
reduction in compensation also applied to other senior executives of the Company
as a result of decreased business performance by the Company or one of its
business units, shall not constitute an Involuntary Termination Following a
Change in Control; (iii) without the Participant's express written consent, the
relocation of the Participant to a facility or a location more than thirty-five
(35) miles from the Participant's then present location; (iv) any purported
termination of the Participant by the Company which is not effected for
Disability or for Cause, or any purported termination for which the grounds
relied upon are not valid; or (v) the failure of the Company to obtain the
assumption of this Agreement by any successors in the event of a change of
control.

        N. Notice of Participation. "Notice of Participation" shall mean an
individualized written notice of participation in the Plan from an authorized
officer of the Company.

        O. Participant. "Participant" shall mean an individual who meets the
eligibility requirements of Article III.

        P. Plan. "Plan" shall mean this Novell, Inc. Senior Management Severance
Plan.

        Q. Plan Administrator. "Plan Administrator" shall mean the Board of
Directors of the Company, or its committee or designate, as shall be
administering the Plan.

        R. Plan Year. "Plan Year" shall mean the Company's fiscal year.

        S. Restricted Business. "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, manufacturer, 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 that is
actually being pursued during the term of this Plan; and (ii) any business that
competes directly or indirectly with the hardware and software business of the
Company.

        T. Restricted Territory. "Restricted Territory" shall mean the counties,
cities or states of the United States.

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        U. Severance Payment. "Severance Payment" shall mean the payment of
severance compensation as provided in Article IV hereof.

        V. Severance Payment Percentage. "Severance Payment Percentage" shall
mean, for each Participant, the Severance Payment Percentage set forth in such
Participant's Notice of Participation.

        W. Target Bonus. "Target Bonus" shall mean the annual percentage of
Participant's Base Salary which is available as a potential bonus.

                                   ARTICLE III

                                   ELIGIBILITY

        A. Waiver. As a condition of receiving benefits under the Plan, an
Employee must sign a general waiver and release (the "Release") on a form
provided by the Company and not revoke the Release within the time permitted
under applicable state or federal law.

        B. Participation in Plan. Each Employee who is designated by the Plan
Administrator and who signs and timely returns to the Company a Notice of
Participation shall be a Participant in the Plan. A Participant shall cease to
be a Participant in the Plan with respect to future Plan Years upon receiving
written notice from the Plan Administrator, in accordance with Article IX.A
herein, at least ten (10) days prior to the beginning of any Plan Year, unless
such Participant has incurred an Involuntary Termination or Involuntary
Termination Following a Change in Control prior to the receipt of such notice. A
Participant entitled to benefits hereunder shall remain a Participant in the
Plan until the full amount of the benefits has been delivered to the
Participant.

        C. Benefit Ineligibility. Employees are not eligible for benefits under
this Plan under any of the following conditions: (i) if he or she is a temporary
employee or temporary agency worker; (ii) if the Company is not treating the
individual as a common-law employee, as conclusively evidenced by its failure to
withhold taxes from the individual's compensation, even if the individual is
determined by a governmental agency or court to be a common-law employee of the
Company; (iii) if he or she is covered under a separate written agreement or
employment contract with the Company relating to severance benefits that is in
effect at the time of his or her termination of employment with the Company;
(iv) if he or she is on an unpaid leave of absence without a right of
reinstatement; or (v) if he or she is otherwise ineligible under Article IV of
this Plan.

                                   ARTICLE IV

                               SEVERANCE BENEFITS

        A. Upon an Involuntary Termination Other than for Cause and Other than
Following a Change in Control. If the Participant's employment with the Company
terminates as a result of an Involuntary Termination other than for Cause and
other than Following a Change in Control, the Participant shall be entitled to
receive the following severance benefits:

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                1. Severance Payment. Participant shall receive a cash payment
equal to the product obtained by multiplying the Participant's Severance Payment
Percentage times the Participant's Base Salary. Any such Severance Payment shall
be paid in cash by the Company to the Participant in substantially equal monthly
installments, subject to the Participant's compliance with Article VII, and
shall be in lieu of any other severance or severance-type benefits to which the
Participant may be entitled under any other Company-sponsored plan, practice or
arrangement. Notwithstanding the forgoing, the Plan Administrator may, in its
sole discretion, pay the Severance Payment in a single, lump sum payment in lieu
of monthly installments.

                2. Option Vesting and Restricted Stock.

                        (i)With respect to any Company stock options held by the
Participant as of the date of such Involuntary Termination, the Company shall
accelerate the vesting of that portion of the Participant's stock options, if
any, which would have vested within one (1) year after the date of the
Participant's Involuntary Termination, such options to remain exercisable,
notwithstanding anything in any other agreement governing such options, for a
period of six (6) months after such Involuntary Termination, subject only to the
original term of the option; and

                        (ii) With respect to any shares of Company common stock
held by the Participant that is, at the time of such Involuntary Termination,
subject to the Company's repurchase right upon termination of the Participant's
employment ("Restricted Stock"), the Company shall waive such repurchase right
as to the number of shares of Restricted Stock that would have vested on the
next anniversary of the Restricted Stock grant date.

                3. COBRA Benefits. Participant shall receive a lump sum payment
in an amount equal to the cost of COBRA continuation for the Participant's
Benefits Continuation Period.

        B. Upon Involuntary Termination Following a Change in Control. If the
Participant's employment with the Company terminates as a direct result of an
Involuntary Termination Following a Change in Control without Cause within two
(2) months prior to or twelve (12) months following a Change in Control, the
Participant shall be entitled to receive the following severance benefits:

                1. Severance Payment. Participant shall receive a cash payment
equal to three (3) times Participant's Base Salary and Target Bonus at the time
of Participant's Involuntary Termination Following a Change in Control. Any such
Severance Payment shall be paid in cash by the Company to the Participant in
substantially equal monthly installments, subject to the Participant's
compliance with Article VII, and shall be in lieu of any other severance or
severance-type benefits to which the Participant may be entitled under any other
Company-sponsored plan, practice or arrangement. Notwithstanding the forgoing,
the Plan Administrator may, in its sole discretion, pay the Severance Payment in
a single, lump sum payment in lieu of monthly installments.

                2. Option Vesting and Restricted Stock.

                        (i) With respect to any Company stock options held by
the Participant as of the date of such Involuntary Termination Following a
Change in Control, the Company shall accelerate the vesting of that portion of
the Participant's stock options, if any, which would have

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vested within two (2) years after the date of the Participant's Involuntary
Termination Following a Change in Control, such options to remain exercisable,
notwithstanding anything in any other agreement governing such options, for a
period of one (1) year after such Involuntary Termination Following a Change in
Control, but in no event later than the expiration of such options as set forth
in the option agreement(s); and

                        (ii) With respect to any shares of Company common stock
held by the Participant that is, at the time of such Involuntary Termination
Following a Change in Control, subject to the Company's repurchase right upon
termination of the Participant's employment ("Restricted Stock"), the Company
shall waive such repurchase right as to the number of shares of Restricted Stock
that would have vested on the next two (2) anniversaries of the Restricted Stock
grant date.

                3. COBRA Benefits. Participant shall receive a lump sum payment
in an amount equal to the cost of COBRA continuation for a period of thirty-six
(36) months after Participant's Involuntary Termination Following a Change in
Control.

        C. Voluntary Resignation; Termination For Cause. If the Participant's
employment terminates by reason of the Participant's voluntary resignation (and
is not an Involuntary Termination and is not an Involuntary Termination
Following a Change in Control), or if the Company terminates the Participant for
Cause, then the Participant shall not be entitled to receive severance or other
benefits under this Plan and shall be entitled only to those benefits (if any)
as may be available under the Company's then existing benefit plans and policies
at the time of such termination.

        D. Disability; Death. If the Participant's employment terminates by
reason of the Participant's death, or by reason of Participant's Disability,
then the Participant shall not be entitled to receive severance or other
benefits under this Plan and shall be entitled only to those benefits (if any)
as may be available under the Company's then existing benefit plans and policies
at the time of such death or Disability.

        E. Integration with Other Payments. Should the Plan Administrator, in
its sole and absolute discretion, determine that any other benefits are or may
become payable, including but not limited to workers' compensation wage
replacement benefits, severance pay, or similar benefits under benefit plans,
severance programs, employment contracts, or applicable laws such as the
Workers' Adjustment and Retraining Notification (WARN) Act, Participant's
benefits under this Plan will be reduced accordingly or alternatively, benefits
previously paid under the Plan will be treated as having been paid to satisfy
such other benefit obligations. In either case, the Plan Administrator will
determine how to apply this provision, and may override other provisions in this
Plan in doing so.

        F. Time of Payment. Severance Payments will be paid as soon as
administratively feasible after Participant's termination of employment, except
that Participant's Severance Payments will not be payable until the expiration
of any revocation time under applicable state and federal law.

                                    ARTICLE V

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          GOLDEN PARACHUTE EXCISE TAX AND NON-DEDUCTIBILITY LIMITATIONS

        In the event that a payment or benefit received or to be received by the
Participant could result in all or portion of such payment to be subject to the
excise tax under Section 4999 of the Code, then the Participant's payment shall
be either (i) the full payment, or (ii) such lesser amount which would result in
no portion of the payment being subject to excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local employment taxes, income taxes and the excise tax
imposed by Section 4999 of the Code, results in the receipt by the Participant,
on an after-tax basis, of the greatest amount of the payment notwithstanding
that all or some portion of the payment may be taxable under Section 4999 of the
Code. All determinations required to be made under this Article V shall be made
by Ernst & Young or any other nationally recognized accounting firm that is the
Company's outside auditor at the time of such determination (the "Accounting
Firm"). The Company shall cause the Accounting Firm to provide detailed
supporting calculations of its determination to the Company and the Participant.
Notice must be given to the Accounting Firm within fifteen (15) business days
after an event entitling the Participant to a payment under this Plan. For
purposes of making a calculation required by this Article, the Accounting Firm
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
applications of Sections 280G and 4999 of the Code. The Company and the
Participant shall furnish to the Accounting Firm such information and documents
as the Accounting Firm may reasonably request in order to make a determination
under this Article. The Company shall bear all costs the Accounting Firm may
reasonably incur in connection with the any calculations contemplated by this
Article.

                                   ARTICLE VI

                        POOLING OF INTERESTS LIMITATIONS

        To the extent any of the benefits (including the equity compensation
vesting acceleration) hereunder would cause a contemplated Change in Control
transaction that was intended to be accounted for as a "pooling-of-interests"
transaction to become ineligible for such accounting treatment under generally
accepted accounting principles, as determined by the Accounting Firm, then this
Agreement shall automatically be deemed amended to provide Employee with such
lesser benefits as would allow for the contemplated Change in Control
transaction to be accounted for as a "pooling-of-interests" transaction.

                                   ARTICLE VII

                   COVENANTS NOT TO COMPETE AND NOT TO SOLICIT

        In the event of a Participant's Involuntary Termination other than for
Cause or Involuntary Termination Following a Change in Control, the Company's
obligations to provide severance pay as provided in Article IV.A and Article
IV.B shall be expressly conditioned upon the Participant's covenants not to
compete and not to solicit as provided herein. In the event the Participant
breaches his or her obligations to the Company as provided herein, the Company's
obligations to make

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severance payments to the Participant pursuant to Article IV.A and Article IV.B
shall cease, without prejudice to any other remedies that may be available to
the Company.

        A. Covenant Not to Compete. For a period of one (1) year following a
Participant's Involuntary Termination other than for Cause or Involuntary
Termination Following a Change in Control, the Participant shall not directly or
indirectly, engage in (whether as employee, consultant, proprietor, partner,
director or otherwise), or have any ownership interest in, or participate in a
financing, operation, management or control of, any person, firm, corporation or
business that is a Restricted Business in a Restricted Territory without the
prior written consent of the Plan Administrator. For this purpose, ownership of
no more than .5% of the outstanding voting stock of a publicly traded
corporation shall not constitute a violation of this provision.

        B. Covenant Not to Solicit. The Participant shall not, for a period of
one (1) year after the Participant's Involuntary Termination other than for
Cause or Involuntary Termination Following a Change in Control: (i) 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 in any manner with the contractual or employment relationship
between the Company and any such employee of the Company. The foregoing shall
not prohibit the Participant or any entity with which the Participant 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. Interpretation. The covenants contained herein are intended to be
construed as a series of separate covenants, one for each county, city and state
or other political subdivision of a 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,
the court shall refuse to enforce any of the separate covenants (or any part
thereof) deemed included in such paragraphs, then such unenforceable covenant
(or such part) shall be deemed to be eliminated from this Plan for the purpose
of those proceedings to the extent necessary to permit the remaining separate
covenants (or portions thereof) to be enforced.

        D. Reasonableness. In the event that the provisions of this Article VII
shall 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.

                                  ARTICLE VIII

                         EMPLOYMENT STATUS; WITHHOLDING

        A. Employment Status. This Plan does not constitute a contract of
employment or impose on the Participant or the Company any obligation to retain
the Participant as an Employee, to change the status of the Participant's
employment, or to change the Company's policies regarding termination of
employment. The Participant's employment is and shall continue to be at-will, as
defined under applicable law. If the Participant's employment with the Company
or a successor

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entity terminates for any reason, the Participant shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Plan, or as may otherwise be available in accordance with the Company's
established employee plans and practices or other agreements with the Company at
the time of termination.

        B. Taxation of Plan Payments. All amounts paid pursuant to this Plan
shall be subject to regular payroll and withholding taxes.

                                   ARTICLE IX

                     SUCCESSORS TO COMPANY AND PARTICIPANTS

        A. Company's Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business and/or assets
shall assume the obligations under this Plan and agree expressly to perform the
obligations under this Plan by executing a written agreement. For all purposes
under this Plan, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection or which becomes bound by the terms of this Plan by
operation of law.

        B. Participant's Successors. All rights of the Participant hereunder
shall inure to the benefit of, and be enforceable by, the Participant's personal
or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.

                                    ARTICLE X

                       DURATION, AMENDMENT AND TERMINATION

        A. Duration. This Plan shall be effective for consecutive one year
periods unless terminated by the Board, provided that any such termination shall
be effective only with respect to future Plan Years. Participants shall be given
notice of a Plan termination within thirty (30) days of the Board's decision. A
termination of this Plan pursuant to the preceding sentence shall be effective
for all purposes, except that such termination shall not affect the payment or
provision of compensation or benefits earned by a Participant prior to the
termination of this Plan.

        B. Amendment and Termination. The Board or, if authorized by the Board,
the Plan Administrator, shall have the discretionary authority to amend the Plan
prior to a Change-in-Control by resolution adopted by at least two-thirds of the
Board or the Plan Administrator, as applicable, provided that no such amendment
shall reduce the benefits for which Participants may be eligible under the Plan.
Subject to the provisions of Article X.A above, the Plan may be terminated prior
to a Change-in-Control by resolution adopted by at least two-thirds of the
Board. If a Change-in-Control occurs, the Plan no longer shall be subject to
amendment, change or termination in any respect.

                                   ARTICLE XI

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                               PLAN ADMINISTRATION

        A. Plan Administrator. The Plan shall be administered by the Plan
Administrator.

                (1) Subject to the provisions set forth in this Plan and to the
specific duties delegated by the Board of Directors to the Plan Administrator,
the Company as the Plan Administrator shall be responsible for the general
administration and interpretation of the Plan and for carrying out its
provisions. The Plan Administrator shall have such powers as may be necessary to
discharge its duties hereunder, including, but not by way of limitation, the
following powers and duties:

        X       discretionary authority to construe and interpret the terms of
                the Plan, to determine eligibility (including a determination
                whether a Participant has experienced a comprehensive and
                substantial reduction in the Participant's duties, authority and
                responsibilities as described in Article II.L and Article II.M),
                and to determine the amount, manner and time of payment of any
                benefits hereunder;

        X       to prescribe procedures to be followed by the Participants for
                purposes of Plan participation and distribution of benefits; and

        X       to take such other action as may be necessary and appropriate
                for the proper administration of the Plan.

        B. Procedures. The Plan Administrator may adopt such rules, regulations
and bylaws and may make such decisions as it deems necessary or desirable for
the proper administration of the Plan. Any rule or decision that is not
inconsistent with the provisions of the Plan shall be conclusive and binding
upon all persons affected by it, and there shall be no appeal from any ruling by
the Plan Administrator that is within its authority, except as otherwise
provided herein.

                                   ARTICLE XII

                          CLAIMS AND APPEALS PROCEDURES

        A. Claim Dispute. If any person (Claimant) believes that benefits are
being denied improperly, the Claimant must file a formal written claim with the
Plan Administrator. Any claim may only relate to a matter under the Plan and not
to any matter under the separation procedures or any other Company policy,
practice or procedure.

        B. Time for Filing Claims. A formal claim must be filed within ninety
(90) days after the date the Claimant first knew or should have known of the
facts upon which the claim is based, unless the Plan Administrator in writing
consents otherwise.

        C. Claim Procedure. A written claim should be sent to the General
Counsel, Novell, Inc., 2211 North First Street, San Jose, California 95131.

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                If the written claim is denied, in whole or in part, the
Claimant will receive notice from the General Counsel, including the specific
reason for the denial, within ninety (90) days of the date the claim was
received. In some cases, more than ninety (90) days may be needed to make a
decision. In such cases, the Claimant will be notified in writing, within the
initial ninety (90) day period, of the reason more time is needed. An additional
ninety (90) days may be taken to make the decision if the Claimant is sent such
a notice. The extension notice will show the date by which the decision will be
sent.

                If no response is received by Claimant within the ninety (90)
day period, the claim is considered denied.

                The appeal procedure which follows gives the rules for appealing
a denied claim.

        D. Appeal Procedures. A claimant may use this procedure if:

                X       no reply at all is received by the claimant within
                        ninety (90) days after filing the claim;

                X       a notice has extended the time an additional ninety (90)
                        days and no reply is received within
                        one-hundred-and-eighty (180) days after filing the
                        claim; or

                X       written denial of the claim for benefits or other
                        matters is received within the proper time limit and the
                        Claimant wishes to appeal the written denial.

        If a claim for benefits is denied, in whole or in part, either expressly
or by virtue of the Claimant not having received a reply, the Claimant or other
duty authorized person, may appeal this denial in writing within sixty (60) days
after the denial is or should have been received. Written request for review of
any denied claim should be sent directly to the Novell, Inc. Senior Management
Severance Plan Appeal Committee, Legal Department, Novell, Inc., 2211 North
First Street, San Jose, California 94131, Attn: General Counsel. The Plan
Administrator serves as the final review under the Plan for all Participants.
Unless the Plan Administrator sends notice in writing that the claim is a
special case needing more time, the Plan Administrator will conduct a review and
decide on the appeal of the denied claim within sixty (60) days after receipt of
the written request for review. If more time is required to make a decision, the
Plan Administrator will send notice in writing that there will be a delay and
give the reasons for the delay. In such cases, the Plan Administrator may have
sixty (60) days more, a total of one-hundred-and-twenty (120) days, to make its
decision.

                Procedure:

                If the Claimant sends a written request for review of a denied
claim, the Claimant has the right to:

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                X       Review pertinent Plan documents which may be obtained by
                        sending a written claim to the General Counsel, Novell,
                        Inc., 2211 North First Street, San Jose, California
                        95131, and

                X       Send to the Plan Administrator a written statement of
                        the issues and any other documents in support of the
                        claim for benefits or other matter upon review.

                The Plan Administrator's decision shall be given to the Claimant
in writing within sixty (60) days or, if extended, one-hundred-and-twenty (120)
days, and shall include specific reasons for the decision. If the Plan
Administrator does not give its decision on review within the appropriate time
span, the Claimant may consider the claim denied.

                The right to receive benefits under this Plan is contingent on a
Claimant using the prescribed claims and appeal procedures to resolve any claim.
Therefore, if a Claimant seeks to resolve any claim by any means other than the
prescribed claims and appeals procedures, he or she must repay all benefits
received under this Plan and shall not be entitled to any further Plan benefits.

                                  ARTICLE XIII

                                     NOTICE

        A. General. Notices and all other communications contemplated by this
Plan shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Participant, mailed
notices shall be addressed to him or her at the home address which he or she
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to the Company's General Counsel,
2211 North First Street, San Jose, California 95131.

        B. Notice of Termination by the Company. Any termination by the Company
of the Participant's employment with the Company shall be communicated by a
notice of termination to the Participant at least fourteen (14) days prior to
the date of such termination (or at least thirty (30) days prior to the date of
a termination by reason of the Participant's Disability). Such notice shall
indicate the specific termination provision or provisions in this Plan relied
upon (if any), shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision or provisions so
indicated, and shall specify the termination date.

        C. Notice by the Participant of Involuntary Termination by the Company
and Involuntary Termination Following a Change in Control. In the event that the
Participant determines that an Involuntary Termination or an Involuntary
Termination Following a Change in Control has occurred, the Participant shall
give written notice to the Company that such Involuntary Termination or
Involuntary Termination Following a Change in Control has occurred. Such notice
shall be delivered by the Participant to the Company within ninety (90) days
following the date on which such Involuntary Termination or Involuntary
Termination Following a Change in Control occurred, shall indicate the specific
provision or provisions in this Plan upon which the Participant relied to

                                       12
<PAGE>   13

make such determination and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such determination. The failure by
the Participant to include in the notice any fact or circumstance which
contributes to a showing of Involuntary Termination or Involuntary Termination
Following a Change in Control shall not waive any right of the Participant
hereunder or preclude the Participant from asserting such fact or circumstance
in enforcing his or her rights hereunder.

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

        A. No Duty to Mitigate. The Participant shall not be required to
mitigate the amount of any benefits contemplated by this Plan, nor shall any
such benefits be reduced by any earnings or benefits that the Participant may
receive from any other source.

        B. Severability. The invalidity or unenforceability of any provision or
provisions of this Plan shall not affect the validity or enforceability of any
other provision hereof, which shall remain in full force and effect.

        C. No Assignment of Benefits. The rights of any person to payments or
benefits under this Plan shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this subsection shall be void. However,
payments and benefits under the Plan may be reduced or offset by any amount a
Participant may owe the Company, to the extent permitted by applicable law.

        D. Assignment by Company. The Company may assign its rights under this
Plan to an affiliate, and an affiliate may assign its rights under this Plan to
another affiliate of the Company or to the Company; provided, however, that no
assignment shall be made if the net worth of the assignee is less than the net
worth of the Company at the time of assignment; provided, further, that the
Company shall guarantee all benefits payable hereunder. In the case of any such
assignment, the term "Company" when used in this Plan shall mean the corporation
that actually employs the Participant.

                                       13<PAGE>   1

                                                                   EXHIBIT 10.11

                                  NOVELL, INC.
                            KEY EMPLOYMENT AGREEMENT

        THIS KEY EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this March 18, 1997 (the "Effective Date"), by and between NOVELL, INC., a
Delaware corporation, 122 East 1700 South, Provo, Utah ("Novell"), and Eric
Schmidt ("Employee").

                                    RECITALS

        A.      Novell is engaged in the process of developing, manufacturing
                and marketing computer hardware and software.

        B.      Commencing upon the Effective Date and through April 6, 1997
                (the "Part-Time Employment Period"), Employee shall be a
                part-time employee of Novell, familiarizing himself with
                Novell's business operations. On April 7, 1997, Employee will
                become (i) the Chief Executive Officer of Novell, and (ii)
                subject to continued election to the Board by the vote of the
                stockholders of the Company, a member of the Board.

        C.      In consideration of the benefits of new employment by Novell, as
                well as other good and valuable consideration set forth herein,
                Employee agrees to enter into this Agreement.

        NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto intending to be legally
bound, hereby agree as follows.

I.      Definitions: As used herein, the following definitions shall apply:

        A.      "Board" shall mean Novell's Board of Directors.

        B.      "Cause" shall mean Employee's termination only upon:

                1.      Employee's continued violations of Employee's
                        obligations to perform the duties and responsibilities
                        normally required of a chief executive officer which are
                        demonstrably willful or deliberate on Employee's part
                        after there has been delivered to Employee a written
                        demand for performance from Novell which described the
                        basis for Novell's belief that Employee has not
                        substantially performed his duties;

                2.      Employee's engaging in willful misconduct which is
                        materially injurious to Novell or its affiliates;

                3.      Employee's committing a felony, an act of fraud against
                        or the misappropriation of property belonging to Novell
                        or its affiliates; or

                                       1
<PAGE>   2

                4.      Employee's willful breaching, in any material respect,
                        the terms of this Agreement or any confidentiality or
                        proprietary information agreement between Employee and
                        Novell.

        C.      A "Change in Control" shall be deemed to have occurred if:

                1.      Novell sells or otherwise disposes of all or
                        substantially all of its assets;

                2.      There is a merger, consolidation or any other corporate
                        reorganization of Novell with any other corporation or
                        corporations or any other entity or person (or a related
                        series of such transactions), provided that the
                        stockholders of Novell, as a group, do not hold,
                        immediately after such event, at least 50% of the voting
                        power of the surviving or successor corporation or any
                        series of transactions.

                3.      Any person or entity, including any "person" as such
                        term is used in Section 13(d)(3) of the Securities
                        Exchange Act of 1934, as amended (the "Exchange Act"),
                        becomes the "beneficial owner" (as defined in the
                        Exchange Act) of Common Stock of Novell representing 40%
                        or more of the combined voting power of the voting
                        securities of Novell.

        D.      "Code" shall mean the Internal Revenue Code of 1986, as amended.

        E.      "Constructive Termination" shall mean that the Employee has
                terminated employment with Novell or its affiliated entities
                because, although Novell has not terminated the Employee's
                employment involuntarily, either the Employee's position, annual
                base salary or responsibilities have been significantly reduced.
                For purposes of this Agreement, a reduction of twenty percent
                (20%) or more in Employee's annual base salary in effect
                immediately prior to such reduction will be deemed to be a
                significant reduction. A reduction in the Employee's annual base
                salary that is part of an overall reduction in compensation also
                applied to other senior executives of Novell as a result of
                decreased business performance by Novell or one of its business
                units shall not constitute a Constructive Termination.

        F.      "Novell" shall mean Novell and its subsidiaries.

        G.      "Restricted Business" shall mean:

                1.      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 Novell or as proposed
                        to be designed, developed, manufactured, sold or
                        supported by Novell pursuant to a development project
                        which is actually being pursued during the term of this
                        Agreement; and

                2.      any business which directly competes with the hardware
                        and software business of Novell.

        H.      "Restricted Territory" shall mean the counties, cities or states
                of the United States.

II.     Employment and Term

                                       2
<PAGE>   3

        A.      This Agreement shall commence as of the Effective Date and shall
                continue until all obligations of the parties hereto are
                discharged following Employee's termination of employment.

        B.      During the term hereof, and subject to other provisions set
                forth herein, Novell may terminate Employee's employment for
                Cause or without Cause.

        C.      If Employee's employment is terminated for Cause or if Employee
                resigns his employment other than upon a Constructive
                Termination, no compensation or payments will be paid or
                provided to Employee pursuant to this Agreement for the period
                following the date upon which such a termination of employment
                is effective.

        D.      If Novell terminates Employee's employment other than for Cause
                or if a Constructive Termination occurs: (i) Employee shall be
                entitled to receive a severance payment from Novell in an amount
                equal to one times Employee's rate of annual base salary and
                Target Bonus (as defined herein) at the time of termination;
                (ii) Employee shall be entitled to receive an amount equal to
                the cost of COBRA continuation for a period of one year after
                termination; (iii) Novell agrees to accelerate the vesting of
                that portion of Employee's stock options, if any, which would
                have vested within one year after the date of Employee's
                termination; and (iv) in the event that Employee holds any
                shares subject to Novell repurchase rights upon termination of
                employment or consulting relationship with the Company, Novell
                agrees to waive such repurchase rights as to the vesting of all
                such shares. The severance payment shall be payable in 12 equal
                monthly installments.

        E.      During the Part-Time Employment Period, Novell shall pay the
                Employee at the rate of $1000 per week. Following the Part-Time
                Employment Period and while employed by Novell pursuant to this
                Agreement, Novell shall pay the Employee as compensation for his
                services a base salary at the annualized rate of $600,000 (the
                "Base Salary"), subject to normal review for potential cost of
                living or performance adjustments. Such salary shall be paid
                periodically in accordance with normal Novell payroll practices
                and subject to the usual, required withholding. Employee
                understands and agrees that neither his job performance nor
                promotions, commendations, bonuses or the like from Novell give
                rise to or in any way serve as the basis for modification,
                amendment, or extension, by implication or otherwise, of this
                Agreement.

        F.      If Employee remains employed by Novell through October 31, 1997,
                Employee shall receive a bonus payment equal to six hundred
                thousand dollars ($600,000) multiplied by a fraction, the
                numerator of which shall be the number of days between the
                Effective Date and October 31, 1997 and the denominator of which
                shall be three hundred and sixty-five, less applicable
                withholding.

        G.      Following October 31, 1997, in addition to Employee's Base
                Salary, Employee will participate in Novell's then current
                incentive bonus program under which Employee will be entitled to
                earn incentive bonus compensation equal to:

                (i)     100% of Employee's base salary if certain performance
                        goals are met (the "Target Bonus"); and

                (ii)    Such additional bonus compensation as may be specified
                        by the Board should such goals be exceeded.

                                       3
<PAGE>   4

        H.      On the Effective Date, Employee shall be granted stock options
                to purchase a total of two million seven hundred and fifty
                thousand shares (2,750,000) shares of Novell Common Stock with a
                per share exercise price equal to 100% of the "Fair Market
                Value," as such term is defined in the Novell 1991 Stock Plan
                (the "Stock Plan"). These options shall be for a term of ten
                years (or shorter upon termination of Employee's employment or
                consulting relationship with Novell) and, subject to accelerated
                vesting as set forth elsewhere herein, shall vest as to 20% of
                the shares originally subject to the option on the first
                anniversary of the date of grant, and as to of 1/60th of the
                shares originally subject to the option each month thereafter,
                so as to be 100% vested five years from the date of grant,
                conditioned upon Employee's continued employment or consulting
                relationship with Novell as of each vesting date. Except as
                specified otherwise herein, these option grants are in all
                respects subject to the terms, definitions and provisions of the
                Stock Plan and all the standard form of stock option agreement
                thereunder to be entered into by and between Employee and Novell
                (the "Option Agreement"), both of which documents are
                incorporated herein by reference; provided, however, that to the
                extent such options may not be granted under the Stock Plan by
                virtue of the limitation on the number of shares subject to
                option that may be granted thereunder in any fiscal year of
                Novell, they shall be granted outside of the Stock Plan pursuant
                to a written option agreement containing the same terms and
                conditions. Any such non-Stock Plan stock options shall be
                registered by the Company on Form S-8 as soon following the
                Effective Time as is practicable.

        I.      On the Effective Date, Employee shall purchase nine hundred
                thousand shares of Novell Common Stock for a purchase price of
                nine thousand dollars ($9,000) (the "Restricted Stock"). Subject
                to accelerated vesting as specified elsewhere in this Agreement,
                the Restricted Stock shall vest as to (i) 30% of the shares
                purchased on the first anniversary of the Employment
                Commencement Date, (ii) 25% of the shares purchased on the
                second anniversary of the Employment Commencement Date, (iii)
                20% of the shares purchased on the third anniversary of the
                Employment Commencement Date, (iv) 15% of the shares purchased
                on the fourth anniversary of the Employment Commencement Date,
                and (v) 10% of the shares purchased on the fifth anniversary of
                the Employment Commencement Date, so as to be 100% vested five
                years following the Employment Commencement Date, conditioned
                upon Employee's continued employment or consulting relationship
                with Novell as of such vesting dates. Except as otherwise
                specified herein, in the event that Employee's employment or
                consulting relationship with Novell terminates, any unvested
                Restricted Stock shall be subject to repurchase by Novell for
                the per share purchase price originally paid by Employee. This
                award is in all respects subject to the terms, definitions and
                provisions of the Stock Plan and the standard form of restricted
                stock purchase agreement to be entered into by and between
                Employee and Novell (the "Restricted Stock Purchase Agreement"),
                both of which documents are incorporated herein by reference.
                Notwithstanding anything in this Agreement to the contrary, in
                the event that the sale by Employee of Novell common stock is
                restricted by federal securities laws (other than Section 16 of
                the Securities Exchange Act of 1934, as amended) or the insider
                trading policies of Novell, at the time any tax liability arises
                as a result of the vesting of Restricted Stock, Novell shall
                loan to Employee sufficient funds to pay such tax liability.
                Such loan shall be pursuant to a Promissory Note, which shall
                accrue interest at the minimum applicable federal rate to avoid
                the imputation of income to the Employee, and shall be payable
                by Employee to Novell no later than thirty (30) days after the
                trading restriction expires.

                                       4
<PAGE>   5

        J.      Employee will be entitled to receive Novell's employee benefits
                made available to other employees and officers to the full
                extent of Employee's eligibility therefor. During Employee's
                employment, Employee shall be permitted, to the extent eligible,
                to participate in any group medical, dental, life insurance and
                disability insurance plans, or similar benefit plans of Novell
                that are available to other comparable employees. Participation
                in any such plan shall be consistent with Employee's rate of
                compensation to the extent that such compensation is a
                determinative factor with respect to coverage under any such
                plan.

        K.      Employee is subject to the Novell policies set forth in the most
                current version of the Employee Handbook, which policies may be
                altered from time to time by Novell. In the event provisions of
                this Agreement are in conflict with the Employee Handbook, the
                provisions of this Agreement shall govern.

III.    Work Responsibilities. During the Part-Time Employment Period, Employee
        shall work on a part-time basis to familiarize himself with the business
        operations of Novell. On April 7, 1997, Employee shall become Novell's
        Chief Executive Officer (the "CEO Commencement Date"). Following the CEO
        Commencement Date and during the term of this Agreement as set forth in
        Section II.A hereof, Employee agrees to devote his full business time,
        skill and attention to his duties as Chief Executive Officer of Novell,
        and shall perform them faithfully and diligently, using his best efforts
        to further the business of Novell. Employee shall report to, and agrees
        to perform such responsibilities and duties as may reasonably be
        required by, the Board from time to time.

IV.     Covenants Not to Compete and Not to Solicit

        A.      Following the Part-Time Employment Period, Employee shall not,
                while employed hereunder, and for a period of one (1) year
                thereafter in the event of a voluntary termination, 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 in a
                Restricted Territory without the prior written consent of
                Novell. It is agreed that (i) ownership of no more than 2% of
                the outstanding voting stock of a publicly traded corporation or
                any stock presently owned by Employee, and (ii) acting as a
                member of any Board of Directors on which Employee is serving as
                of the Effective Date, shall not constitute a violation of this
                provision.

        B.      Employee agrees that for a period of one (1) year after his
                employment hereunder terminates, Employee shall not:

                1.      solicit, encourage, or take any other action which is
                        intended to induce any other employee of Novell to
                        terminate his or her employment with Novell; or

                2.      interfere with the contractual or employment
                        relationship between Novell and any such employee of
                        Novell.

                The foregoing shall not prohibit Employee or any entity with
                which Employee may be affiliated from hiring a former employee
                of Novell; provided that such hiring results exclusively from
                such former employee's affirmative response to a general
                recruitment effort.

                                       5
<PAGE>   6

        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 IV 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.

V.      Reasonableness of Covenants. Employee represents that he: (a) is
        familiar with the covenants not to compete and not to solicit , and (b)
        is fully aware of and acknowledges his obligations hereunder, including
        without limitation the reasonableness of the length of time and scope of
        these covenants. Employee acknowledges that breach of Employee's
        covenants not to compete and not to solicit in Section IV would cause
        irreparable injury to Novell, and agrees that in the event of such
        breach Novell shall be entitled to seek injunctive relief under
        applicable law without the necessity of proving actual damages.

VI.     Novell Agreements. As of the Effective Date, Employees agrees to enter
        into Novell's Intellectual Property Agreement as well as Novell's
        Conflicts Disclosure Form.

VII.    At-Will Employment. Novell and Employee acknowledge that Employee's
        employment is and shall continue to be at-will, as defined under
        applicable law. If Employee's employment terminates for any reason,
        Employee shall not be entitled to any payments, benefits, damages,
        awards or compensation other than as provided by this Agreement or other
        written Novell benefit plans.

VIII.   Change in Control. In the event that Employee's employment with Novell
        or its successor is terminated without Cause following a Change in
        Control, or Employee experiences a Constructive Termination following a
        Change in Control:

        A.      Employee shall receive a severance payment in an amount equal to
                two times Employee's rate of annual Base Salary and Target Bonus
                at the time of termination;

        B.      Employee shall receive an additional payment equal to the cost
                of COBRA continuation for a period of eighteen months after
                termination;

        C.      Novell agrees to accelerate the vesting of that portion of
                Employee's Novell stock options, if any, which would have vested
                within one year after the date of Employee's termination. No
                other portion of Employee's stock option shall be accelerated.

        D.      In the event that Employee holds any shares subject to Novell
                repurchase rights upon termination of employment, Novell agrees
                to waive such repurchase rights as to the vesting of the greater
                of (i) the number of shares that would have vested within one
                year after the date of Employee's termination, or (ii) one-half
                of the number of shares not vested on the date of Employee's
                termination.

                                       6
<PAGE>   7

        E.      The payments set forth in Sections VIII.A and VIII.B shall be
                payable upon the date of Employee's termination.

        Termination of employment without Cause, including Constructive
        Termination, shall be presumed to be "following a Change in Control" if
        it takes place at any time within two (2) months before or 1 (one) year
        after a Change in Control.

IX.     Best Results: 280G Excise Tax Gross-Up on Excise Tax Related to Stock
        Option Vesting Acceleration. In the event that any payment or benefit
        received or to be received by Employee upon a Change in Control would
        result in all or a portion of such payment to be subject to excise tax
        under Section 4999 of the Code, then the Employee's payment shall be
        either (i) the full payment or (ii) such lesser amount which would
        result in no portion of the payment being subject to excise tax under
        Section 4999 of the Code, whichever of the foregoing amounts, taking
        into account the applicable Federal, state, and local employment taxes,
        income taxes, and the excise tax imposed by Section 4999 of the Code,
        and also taking into account Novell's obligation to pay to Employee the
        Excise Tax Amount (as defined below) related to the accelerated vesting
        of Employee's Novell stock options, results in the receipt by Employee,
        on an after-tax basis, of the greatest amount, notwithstanding that all
        or some portion of the payment may be taxable under Section 4999 of the
        Code. If the full payment is to be made to Employee pursuant to the
        preceding sentence, Novell shall pay to Employee an amount equal to the
        "Excise Tax Amount" relating to the accelerated vesting of Employee's
        Novell stock options, such that Employee shall be fully "grossed-up" as
        to the excise tax relating to the accelerated vesting of such options.
        The "Excise Tax Amount" means a calculation of Employee's Code Section
        4999 excise tax liability relating to the vesting of Employee's Novell
        stock options, including any excise tax liability relating to payments
        to be made pursuant to the preceding sentence. For purposes of
        determining the Excise Tax Amount, the Code Section 4999 excise tax
        liability relating to the vesting of Employee's Novell stock options
        shall be calculated by allocating the "Base Amount" (as such term is
        defined in Code Section 280G(b)(3) pro rata among the Novell stock
        option acceleration and any other benefits (other than the Excise Tax
        Amounts payments) that are determined to be "Parachute Payments" (as
        such term is defined in Code Section 280G(b)(2)). All determinations
        required to be made under this Section IX shall be made by Ernst & Young
        or any other nationally recognized accounting firm which is Novell's
        outside auditor at the time of such determination, which firm must be
        reasonably acceptable to Employee (the "Accounting Firm"). Novell shall
        cause the Accounting Firm to provide detailed supporting calculations of
        its determinations to Novell and Employee. Notice must be given to the
        Accounting Firm within fifteen (15) business days after an event
        entitling Employee to a payment under this Agreement. All fees and
        expenses of the Accounting Firm shall be borne solely by Novell. The
        Accounting Firm's determinations must be made with substantial authority
        (within the meaning of Section 6662 of the Code).

X.      Disability or Death. If Employee's employment hereunder terminates due
        to his total and permanent disability (as defined in Section 22(e)(3) of
        the Code) or death, then such termination shall be treated as if it were
        a termination without Cause.

XI.     Amounts Payable Subject to Withholding. Any amounts payable hereunder,
        including any amounts to be paid in the event of a termination without
        Cause or a Constructive Termination, shall be subject to applicable tax
        withholding.

XII.    Arbitration. The parties hereto agree that any dispute or controversy
        arising out of, relating to, or in connection with this Agreement, or
        the interpretation, validity, construction, performance,

                                       7
<PAGE>   8

        breach, or termination thereof, shall be finally settled by binding
        arbitration to be held in Santa Clara County, California under the
        Employment Dispute Resolution Rules of the American Arbitration
        Association as then in effect (the "Rules"). The arbitrator may grant
        injunctions or other relief in such dispute or controversy. The decision
        of the arbitrator shall be final, conclusive and binding on the parties
        to the arbitration, and judgement may be entered on the decision of the
        arbitrator in any court having jurisdiction.

        The arbitrator shall apply California law to the merits of any dispute
        or claim, without reference to rules of conflicts of law, and the
        arbitration proceedings shall be governed by federal arbitration law and
        by the Rules, without reference to state arbitration law, provided,
        however, that this arbitration provision shall not preclude Novell from
        seeking injunctive relief from any court having jurisdiction with
        respect to any disputes or claims relating to or arising out of the
        misuse or misappropriation of Novell's trade secrets or confidential and
        proprietary information. The arbitrator shall award costs and fees,
        including reasonable attorneys' fees to the prevailing party, or shall
        be free to apportion costs and fees as deemed reasonable under the
        circumstances.

        EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION XII, WHICH DISCUSSES
        ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
        EMPLOYEE AGREES TO SUBMT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
        CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
        CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
        ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
        EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
        DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY.

XIII.   Integration. This Agreement, including the documents referenced in
        Sections II and VI of this Agreement, set forth the entire understanding
        of the parties hereto with respect to the subject matter hereof and
        supersedes all previous communications, negotiations and agreements
        among the parties, whether written or oral. No waiver, alteration, or
        modification, if any, of the provisions of this Agreement shall be
        binding unless in writing and signed by duly authorized representatives
        of the parties hereto.

XIV.    Successors. Novell shall require any successor or assignee, in
        connection with any sale, transfer or other disposition of all or
        substantially all of Novell's assets or business, whether by purchase,
        merger, consolidation or otherwise, expressly to assume and agree to
        perform Novell's obligations under this Agreement in the same manner and
        to the same extent that Novell would be required to perform if no such
        succession or assignment has taken place.

XV.     Severability. If any term or provision of this Agreement shall be held
        to be invalid or unenforceable for any reason, such term or provision
        shall be ineffective to the extent of such invalidity or
        unenforceability without invalidating the remaining terms and provisions
        hereof, and this Agreement shall be construed as if such invalid or
        unenforceable term or provision had not been contained herein.

XVI.    Notices. Any notice pursuant to the Agreement shall be deemed validly
        given or served if given in writing and delivered personally or ten (10)
        calendar days after being sent by U.S. registered or certified mail,
        return receipt requested and postage prepaid. In the case of Employee,
        mailed notices shall be addressed to him or her at the home address
        which he most recently communicated to Novell in writing. In the case of
        Novell, mailed notices shall be addressed to

                                       8
<PAGE>   9

        Novell, Inc., 1555 N. Technology Way, Orem, Utah 84057, and all notices
        shall be directed to the attention of Novell's General Counsel.

XVII.   Title and Captions. Section titles or captions to this Agreement are for
        convenience only and shall not be deemed part of this Agreement or in no
        way define, limit, augment, extend, or describe the scope, content, or
        intent of any part or parts of this Agreement.

XVIII.  Pronouns and Plurals. Whenever the context may require, any pronoun used
        herein shall include the corresponding masculine, feminine, or neuter
        forms and the singular form of nouns, pronouns, and verbs shall include
        the plural and vice versa. Each of the foregoing genders and plurals is
        understood to refer to a corporation, partnership, or other legal entity
        when the context so requires.

XIX.    Further Action. The parties shall execute and deliver all documents or
        instruments, provide all information, and take or forebear from all such
        action as may be necessary or appropriate to achieve the purposes of
        this Agreement.

XX.     Applicable Law. This Agreement shall be construed in accordance with and
        governed by the laws of the State of California.

XXI.    Waiver. No failure by any party to insist upon the strict performance of
        any covenant, duty, agreement, or condition of this Agreement or to
        exercise any right or remedy consequent upon a breach thereof shall
        constitute a waiver of any such breach or of such or any other covenant,
        agreement, term or condition. Any party may, by notice delivered in the
        manner provided in this Agreement, but shall be under no obligation to,
        waive any of its rights or any conditions to its obligations hereunder,
        or any duty, obligation or covenant of the other party. No waiver shall
        affect or alter the remainder of this Agreement but each and every other
        covenant, agreement, term, and condition hereof shall continue in force
        and effect with respect to any other then existing or subsequently
        occurring breach.

XXII.   Counterparts. This Agreement may be executed in several counterparts,
        each of which shall be an original, but all of which together shall
        constitute one and the same agreement.

XXIII.  Employee Acknowledgment. Employee acknowledges that before signing this
        Agreement, Employee was given an opportunity to read it, evaluate it,
        and consult with an attorney and other personal advisors.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

EMPLOYEE:                                          NOVELL:

/s/Eric Schmidt                                    /s/John A. Young
-------------------------                          -----------------------------
Eric Schmidt                                       John A. Young

                                       9

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