Employment Agreement - Novell Inc. and Chris Stone
Novell, Inc.
January 30, 2002
Mr. Chris Stone
12 Old Meadow Lane
Harvard, MA 01451
Dear Chris,
On behalf of Novell, Inc. ("Novell"), I am pleased to
offer you the position of Vice Chairman-Office of the
Chief Executive Officer of Novell (the "Vice
Chairman"). Your responsibilities as the Vice
Chairman are more fully described in the attached
Schedule 1.
In this role you will report to Jack Messman,
Chairman and Chief Executive Officer of Novell. I am
eager to see the results of your contribution to
Novell as you offer your considerable talents and
abilities--and hope that we in turn enrich your
career and contribute to the fulfillment of your
professional goals.
Your gross annual base salary, exclusive of bonuses,
commissions and other incentive pay, will be
$600,000.00. This amount will be paid in installments
in accordance with Novell's standard payroll
practices (less applicable withholding).
In addition to your base salary, you will be eligible
to participate in Novell's bonus program which this
year will be paid quarterly. To participate in the
quarterly bonus program, you must be employed for the
entire quarter for which that bonus applies. Your
bonus will be based on company operating profit and
individual objectives established between yourself
and Jack. Your annualized target bonus will represent
100% of your base salary for the first 12 months, of
which 50% will be guaranteed.
To demonstrate our desire for you to begin employment
by March 1, 2002, Novell will pay you a sign-on bonus
of $350,000.00 (less applicable withholding). This
amount will be paid within three weeks of your first
date of employment. If you voluntarily terminate your
employment with Novell within the first 12 months of
the day that your employment commences, you agree
that you will repay Novell a pro-rated portion of the
sign-on bonus.
You will also be granted shares of Novell restricted
stock and a non-qualified stock option to purchase
shares of Novell common stock. These grants are more
fully described in the attached Schedule 2.
In addition to the foregoing, you will be eligible
to participate in the Novell, Inc. Senior Management
Severance Plan (the "Plan"). Schedule 3 more fully
explains your participation in the Plan. A copy
of the Plan is also included in this offer letter
for your reference.
Novell also offers an outstanding benefit package,
which we view as an important part of our
compensation program. This full range benefit program
includes: four weeks of vacation, life, medical,
dental and disability insurance. Details regarding
these benefits are provided to you in the attached
Novell 2002 Flexware Comparison Chart. Other terms
that apply to this offer are set forth in the
attached Schedule 4:
Your expected start date will be March 1, 2002.
Federal employment laws require that you provide
verification of your eligibility to work in the
United States before you start employment. Please
review the I-9 instructions and bring the appropriate
identification necessary to complete the form on your
first day of employment.
If you accept this offer of employment, you
acknowledge and agree that the rights and obligations
under this offer letter and its attached schedules
and exhibit (the "Offer Letter") shall survive the
termination of your employment with Novell for any
reason and shall be binding upon your heirs,
executors, administrators and legal representatives.
This Offer Letter, upon its acceptance by you, is
binding on Novell's successors and assigns, and all
covenants in this Offer Letter shall inure to the
benefit of and be enforceable by said successors or
assigns.
The interpretation, performance and enforcement of
this Offer Letter shall be governed by and construed
in accordance with, the laws of the Commonwealth of
Massachusetts, without reference to conflicts of laws
principles. In addition, you agree that any dispute,
claim or proceeding arising out of or relating to
this Offer Letter shall be commenced and maintained
in any state or federal court in the Commonwealth of
Massachusetts and you submit to the exclusive venue
and jurisdiction of such court. The language of all
parts of this Offer Letter shall be construed as a
whole according to its fair meaning and shall not be
construed strictly either for or against either
party. Moreover, the terms "and," and "or" shall both
mean "and/or."
You acknowledge and agree that your acceptance of the
provisions set forth in this Offer Letter are a
material inducement to Novell's agreement to grant
restricted stock and stock options to purchase
Novell's common stock. You agree that the
restrictions contained in this Offer Letter are
necessary for the protection of the business and
goodwill of Novell and you consider them to be
reasonable for such purpose.
You also acknowledge and agree that upon your
acceptance of this offer of employment that any
breach or threatened breach of any provision of this
Offer Letter will cause Novell substantial and
irrevocable damage and monetary damages would be
inadequate to compensate Novell and, in addition to
any other remedies or rights it may have, Novell
shall be entitled to seek an injunction and all other
available equitable relief to enforce the terms of
this Offer Letter.
You further acknowledge and agree that the provisions
in this Offer Letter are necessary to protect
Novell's interests and are reasonable under the
circumstances, given that Novell conducts business
worldwide and that a competitive business may be
carried out anywhere in the world as a result of
advanced communications technology. Each provision
herein shall be treated as a separate and independent
clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of
the other clauses of the Offer Letter. If any
provision of this Offer Letter shall for any reason
be held to be excessively broad as to length of time,
scope, range of activities, geographic area or
otherwise so as to be unenforceable at law, such
provision(s) shall be reformed and construed by the
appropriate judicial body to the fullest extent
enforceable, and the remaining provisions of this
Offer Letter will not be affected.
This Offer Letter will remain valid through March 1,
2002. Please signify acceptance of this offer by
signing the "Acceptance and Acknowledgment" attached
to this Offer Letter, as well as Novell's
Intellectual Property Agreement, Novell's Conflicts
Disclosure Form, and the Licensing of Technology
Transfer Questionnaire, all of which are enclosed.
Return the signed copies of these documents to Novell
Human Resources c/o Alan Friedman (at 8 Cambridge
Center, Cambridge, MA 02142) in the enclosed
pre-addressed envelope, and retain any copies for
your files. Please understand that your employment
with Novell constitutes at-will employment.
Again, we look forward to your joining Novell. If you
have questions or wish to discuss this offer, please
contact me.
Sincerely,
Alan J. Friedman
Senior Vice President, People
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I accept the offer of employment from Novell as set
forth in the offer letter dated January 30, 2002,
together with its attached schedules (the "Offer
Letter"). I understand and acknowledge that my
employment with Novell is for no particular duration
and is at-will, meaning that Novell or I may
terminate the employment relationship at any time,
with or without cause and with or without prior
notice. Additionally, I acknowledge that this offer
of employment is contingent upon successful
completion of a background check which is currently
in progress and, if applicable, upon authorization in
the form of an export license from the U.S. Dept. of
Commerce, Bureau of Export Administration, Office of
Export Licensing or the U.S. Department of State,
Office of Defense Trade Controls.
I understand and agree that the terms and conditions
set forth in the Offer Letter represent the entire
agreement between Novell and me superseding all prior
negotiations and agreements, whether written or oral.
I understand that the terms and conditions described
in the Offer Letter are the terms and conditions of
my employment. No one other than Novell's Senior Vice
President of People or the CEO of Novell is
authorized to enter into any employment or other
agreement that modifies the terms of the Offer
Letter, and any such modification must be in writing
and signed by either such executive. In addition, I
understand that any promotions, increases in
compensation and/or offers regarding other positions
must be in writing and signed by my manager and the
appropriate individual in the Human Resources
Department. I understand that Novell may modify
benefits as well as other plans and programs from
time to time as it deems necessary. As an employee of
Novell I understand and agree that I will be bound to
abide by the company's policies and procedures.
Signature
Chris Stone
Date
<PAGE>
Schedule 1 to Chris Stone offer letter of January 30, 2002
As Vice Chairman-Office of the Chief Executive Officer of Novell, Inc., you
will have responsibility for following areas within Novell:
1. Research & Development
2. Marketing (including Product Marketing, Outbound Marketing, and Marcom)
3. Alliances
4. Novell Technical Services (Novell Customer Services and Education)
5. Solutions Development
6. Consulting (Functional Leadership)
7. Industry Analysts
8. Chief Technology Officer
At an appropriate time, Novell will separate the Information Technology
Department from the financial function and have it report to you. Novell's
organizational structure will need to change to accommodate these reporting
relationships. Novell will endeavor to make these organizational changes as
quickly as possible upon your arrival.
<PAGE>
Schedule 2 To Chris Stone Offer Letter of January 30, 2002
Grant of Novell Restricted Stock
Upon the commencement of your employment with Novell, you will be granted
200,000 shares of Novell restricted stock according to the following vesting
schedule:
o 10% on the first annual anniversary date of the grant
o 10% on the second anniversary date of the grant
o 80% on the third anniversary date of the grant
Grant of Non-Qualified Novell Stock Option
Upon the commencement of your employment with Novell, you will be granted a
non-qualified stock option to purchase 600,000 shares of Novell common stock at
an exercise price equal to the fair market value (as determined in accordance
with the applicable Novell stock plan) of the stock on your first day of
employment. Your option will vest according to the following schedule:
o 25% on the first annual anniversary date of the grant, and thereafter
the remaining 75% in equal monthly installments over the next three
years so that this grant will be fully vested on the fourth anniversary
of your date of grant
Both the grant of restricted stock and the non-qualified stock option are
subject to you executing the appropriate documentation that will confirm the
action taken by the Compensation Committee of the Novell Board of Directors in
connection with these grants. The Shareholder Services Department will provide
you with this documentation upon the commencement of your employment.
<PAGE>
Schedule 3 to Chris Stone Offer Letter of January 30, 2002
You will be able to participate in the Novell, Inc. Senior Management Severance
Plan (the "Plan") and you will be eligible for the benefits provided under the
Plan subject to the following specific clarifications:
1. With respect to your severance payment, as described under
Article IV A.1.of the Plan, it will be 18 months of your base
salary.
2. With respect to your non-compete and non-solicit covenant, as
described in Article VII A. and B. of the Plan respectively,
the time period associated with each is (i) 18 months in the
case of an involuntary termination other than for cause and
other than following a change in control, and (ii) 24 months
in the case of an involuntary termination following a change
in control.
<PAGE>
Schedule 4 to Chris Stone Offer Letter of January 30, 2002
You recognize that it is important to protect the rights to
property, trade secrets and confidential information and any
related rights belonging to Novell, including its
predecessors and successors, and its past and present
subsidiaries, business units, divisions and Affiliated
Companies ("Novell"). "Affiliated Companies" of Novell will
be companies directly or indirectly controlling, controlled
by or under common control with Novell, Inc. A Company is
controlled by ownership of more than 50% of shares entitled
to vote for directors or persons performing a similar
function, or by actual control of the Board of Directors. As
such, in consideration and as a condition of your initial
and continued employment with Novell and the additional
benefits associated therewith, you agree as follows:
Confidential Information: At all times, whether during or
after termination (for any reason) of your employment with
Novell, you will keep in strictest confidence and trust
Novell's Confidential Information (defined below), including
that which you create. Except as may be necessary to perform
your duties for Novell or except with prior written
permission of the CEO of Novell, you will not, directly or
indirectly, disclose to any person or entity, or use or
permit to be used, any Confidential Information.
Novell Property: You agree that all Novell Property (defined
below) shall be and remain the sole and exclusive property
of Novell. You agree that during your employment you shall
not make, use or permit to be used any Novell Property
except for the benefit of Novell. You further agree that
after termination of your employment with Novell for any
reason, you will not use, or permit others to use, any
Novell Property. Upon termination of your employment with
Novell for any reason, you will immediately surrender to
Novell all Novell Property in your possession, custody or
control.
Disclosure and Assignment of Inventions: You will fully and
promptly disclose to Novell and no one else all Inventions
(defined below) generated, authored, conceived, discovered,
developed or reduced to practice or learned by you, either
alone or jointly with others, while you are employed by
Novell. You agree that all Inventions are and will be the
sole and absolute property of Novell (and its assigns), as
works made for hire or otherwise. To the extent any
Inventions are not or are deemed not to be works made for
hire, you hereby assign to Novell any and all rights, title
and interest (including but not limited to, tangible and
intangible rights such as patents, copyrights, trademarks,
trade secrets, licensing and publishing rights) that you now
have or may acquire in and to all Inventions, benefits and
rights relating thereto, domestic or foreign. You hereby
waive all claims to moral rights you may have in Inventions.
You agree that you will sign all papers, including, without
limitation, copyright applications, patent applications,
declarations, oaths, formal assignments, assignment of
priority rights, and powers of attorney, which Novell may
deem necessary or desirable in order to protect its rights
and interests in any Invention. You further agree to assist
Novell in every reasonable way, both during and after your
employment with Novell (at Novell's expense), to obtain,
maintain and from time to time enforce patents, copyrights,
trademarks, trade secrets, mask work, and other rights and
protections relating to Inventions.
Prior Inventions: If, before employment with Novell, you
created any Inventions that you wish not to be subject to
this Schedule 4, then all such Inventions must be identified
in the attached Exhibit A. Your failure to attach such
Exhibit A to this Schedule 4 and to sign your initials on
the next line constitutes your representation that you have
made no such Inventions by the time you signed this Schedule
4.
Non-Solicitation: While you are employed by Novell and for a
two-year period after voluntary termination of your
employment for any reason, you will not, without prior
written permission from the CEO of Novell, directly or
indirectly (whether alone or as a partner, joint venturer,
consultant, officer, director, investor, employee, agent, or
independent contractor), whether for yourself or on behalf
of any other person or entity, actually or attempt to:
(a) Solicit (defined below) any Employee (defined below) to
become employed or retained by any person or entity other
than Novell; retain, employ or hire any Employee; or induce,
encourage, persuade or cause any Employee to terminate
employment with Novell for any reason.
(b) accept employment with a competitor of Novell in which
you knowingly interfere with contracts or related follow-on
business in effect at the time of your termination between
Novell and its customers and/or partners.
(c) knowingly permit any person or entity that employs you
or that is directly or indirectly controlled by you to
engage in any of the conduct prohibited by this
Non-Solicitation section.
No Conflicting Obligations: You represent that you have no
interest or obligation that is inconsistent or in conflict
with this Schedule 4, or that may prevent, limit or impair
your performance of any part of this Schedule 4. You agree
to notify Novell immediately if any such interest or
obligation arises. You also represent that you will not
bring with you or disclose to Novell, or use in the
performance of your responsibilities at Novell, any
confidential information not generally available to the
public of a former employer or any other party, unless you
have obtained written authorization for its possession and
use. You also agree that, during your employment by Novell,
you shall abide by any confidentiality obligations you may
owe to any former employer or other party. You also agree
and represent that you are not bound by any valid agreement
or obligation of non-competition or non-solicitation to any
former employers or other parties.
Employee At-Will: Your employment is "at-will" and, as such,
Novell or you may terminate your employment for any reason
at any time. There are no representations or promises that
your employment either will continue for a specific period
or be terminated only under particular circumstances.
Definitions: The terms used in this Schedule 4 have the
following meaning:
(a) "Confidential Information" means all information and
know-how, whether or not in writing, of a private, secret or
confidential nature concerning the Company's business or
financial affairs and includes, but is not limited to, the
following: any and all versions of Novell's computer
software and documentation and all other software, hardware,
algorithms, schematics, source documents, engineering,
strategic and tactical plans, documentation and information
created, developed, produced or distributed by Novell;
Novell's business methods and practices and all other data
or information concerning Novell's business; the corporate
data repository known as "Knowledgeworks" or as it may later
be known, and all the information and data contained
therein, including without limitation templates,
methodologies, handbooks, matrices and client deliverables;
names, addresses, business information, contacts,
requirements and lists of all Novell actual or potential
suppliers, customers and partners, and the nature of
Novell's relationships with such persons or entities; sales,
strategic, tactical, business, financial or marketing plans,
budgets, reports, projections and other information;
information regarding compensation, employees' performance
and all other personnel-related matters; confidential,
proprietary or trade secret information provided to Novell
by its potential or actual customers, suppliers, partners,
employees, consultants, co-venturers or other third parties;
and any other information not generally known to the public
(including information about Novell's operations, finances,
products or services) that Novell maintains or otherwise
considers as confidential.
(b) "Novell Property" includes, but is not limited to the
following: all originals and copies (in whatever form) of
Confidential Information and Inventions, and any and all
notes, data, notebooks, memoranda, lists, records, reports,
drawings, sketches, specifications, computer programs,
designs, graphics, architectures, frameworks, devices and
models (or portions of any of them), passwords, codes,
personal computers, laptops, fax machines, scanners,
copiers, printers, tools, cd-roms, diskettes, intangible
information stored on diskettes, pagers, cellular phones,
credit cards, telephone charge cards, manuals, building keys
and passes, access cards, parking passes, and any
documentation or other materials of any nature, whether
written, printed, electronic or in digital format or
otherwise, relating to any matter concerning Novell's
business and any other Novell Property in my possession,
custody or control.
(c) "Employee" shall mean any employee of Novell, or any
person whose employment with Novell terminated (for any
reason) within six months of any activity prohibited by
subsection (a) of the Non-Solicitation section.
(d) "Inventions" includes, but is not limited to, the
following: all discoveries, developments, designs,
improvements, inventions, formulae, processes, methods,
works of authorship, articles, books, manuals, techniques,
computer software or hardware programs, strategies, trade
secrets, know-how and data, whether or not patentable or
registerable, and all work product (by me or anyone else)
relating thereto, that (a) relate to research or development
activities or the business of Novell or any actual or
potential customer, partner or supplier of Novell; or (b)
result from tasks assigned to you by Novell; or (c) result
from use of premises or personal property (whether tangible
or intangible) owned, leased, contracted for or controlled
by Novell.
(e) "Solicit" includes, without limitation, any and all
involvement by you in any communications or contacts with
any Employee or Customer/Partner (or any person or entity on
his/her/its respective behalf), regardless of whether or not
you make the first contact, concerning (i) with respect to
subsection (a) of the Non-Solicitation Section: potential
employment, terms and conditions of employment or job
opportunities with any person or entity other than Novell;
and (ii) with respect to subsection (b) of the
Non-Solicitation Section, the potential performance of
services, conduct of business or forming of relationships
with any person or entity other than Novell. In addition,
"solicit" for purposes of subsection (a) of the
Non-Solicitation Section also includes your involvement in
any manner in any interviewing, recruiting or hiring
processes that may involve an Employee.
The above terms/modifications of this Schedule 4 supersede
all prior or contemporaneous agreements, representations or
understandings, written or oral, by or between Novell and
you concerning the subject matter set forth in this Schedule
4, and shall constitute the only agreement between the
parties concerning such subject matter. This Schedule 4 may
only be modified by a court of competent jurisdiction or a
written agreement signed by you and an executive vice
president of Novell. Novell's waiver of any default of you
shall not constitute a waiver of its rights under this
Schedule 4 with respect to any subsequent default by you.
<PAGE>
Exhibit A to Schedule 4
Disclosure of Prior Inventions
(If applicable, please provide information below)