2 The Business Wire TBW-1850 WP BW733 APR 6,1990 10:55 PACIFIC 13:55 EASTERN ( BW)(NOVELL/LOTUS-2-RPT)(NOVL)(LO TS) Novell and Lotus sign letter of intent to merge Business Editors/Computer Writers REPEATING...DUE TO LINE TROUBLES PROVO, Utah--(BUSINESS WIRE)--Novell Inc. (NASDAQ:NOVL) and Lotus Development Corp. (NASDAQ:LOTS) jointly announced Friday an agreement in principle to merge the two companies. Under a letter of intent signed Friday, Lotus will issue 1.19131 shares of Lotus common stock for each share of Novell common stock. The exchange ratio values each company at its current market valuation, based on the average closing price of each company over the last 10 trading days. As a result, Lotus would issue approximately 41.6 million new shares, based on currently outstanding shares, and assuming conversion of Novell's outstanding convertible subordinated debentures. The two companies have agreed to combine their boards of directors. Jim Manzi will continue as chairman, president and chief executive officer of Lotus and Ray Noorda will become vice chairman of Lotus and continue as Novell's chief executive officer. The transaction will be accounted for as a pooling of interests. Novell will become a wholly owned subsidiary of Lotus. Lotus' fiscal 1989 revenues were $556 million. Novell posted fiscal 1989 revenues of $422 million. "Lotus and Novell come together with successful heritages; each with leading products in their respective principal market, representing approximately 10 million Lotus users and 5 million Novell users. In addition, both companies are in the midst of strong product cycles. The synergy from a customer, sales and distribution standpoint and in terms of future product offerings is tremendous," Noorda said. "The merger combines two great companies which share a very similar strategy and focus," Manzi said. "Both Novell and Lotus are executing identical cross-platform strategies, both companies are heavily invested in networked and organizational computing, and we both believe customers will benefit from the complementary nature of our software offerings which, when combined, result in a strong suite of solutions meeting our customers needs. "In addition to leading the Novell unit, Ray Noorda will make significant contributions to Lotus by realizing the gains of this combination for our customers, employees and shareholders," Manzi said. The consummation of the merger is subject to the execution of a definitive merger agreement, approval of both companies' boards of directors and stockholders, customary regulatory approvals and normal conditions of closing. The parties are looking toward a closing in July 1990. Novell Inc., headquartered in Provo, is the leading provider of local area network server system software that integrates desktop computers, servers, and minicomputer and mainframe hosts for business-wide computing. Novell's NetWare network computing products manage and control the sharing of services, data and applications among PC workgroups, departmental networks and across business-wide information systems. The company's products support standards to integrate DOS, OS/2, MacIntosh and UNIX desktop computers with IBM, DEC and UNIX hosts. Lotus Development Corp., headquartered in Cambridge, Mass., is the leading provider of applications software for personal computers and information services delivered on CD-ROM, and is a worldwide supplier of applications software for workstations, minicomputers and mainframes. --30--cs/ix CONTACT: Novell Inc., Provo Jan Johnson, 801/429-5867 Peter Troop, 408/473-8361 Lotus Development Corp., Cambridge Richard Eckel, 617/225-1284 Heidi Sinclair, 617/225-1364 KEYWORD: MASSACHUSETTS UTAH REPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-720-0012 or 800-225-2030; SF 415-986-4422 or 800-227-0845; LA 213-380-8383 !3 The Business Wire TBW-1837 WP BW068 APR 6,1990 10:54 PACIFIC 13:54 EASTERN ( BW)(NOVELL/LOTUS-2)(NOVL)(LOTS) Novell and Lotus sign letter of intent to merge Business Editors/Computer Writers PROVO, Utah--(BUSINESS WIRE)--Novell Inc. (NASDAQ:NOVL) and Lotus Development Corp. (NASDAQ:LOTS) jointly announced Friday an agreement in principle to merge the two companies. Under a letter of intent signed Friday, Lotus will issue 1.19131 shares of Lotus common stock for each share of Novell common stock. The exchange ratio values each company at its current market valuation, based on the average closing price of each company over the last 10 trading days. As a result, Lotus would issue approximately 41.6 million new shares, based on currently outstanding shares, and assuming conversion of Novell's outstanding convertible subordinated debentures. The two companies have agreed to combine their boards of directors. Jim Manzi will continue as chairman, president and chief executive officer of Lotus and Ray Noorda will become vice chairman of Lotus and continue as Novell's chief executive officer. The transaction will be accounted for as a pooling of interests. Novell will become a wholly owned subsidiary of Lotus. Lotus' fiscal 1989 revenues were $556 million. Novell posted fiscal 1989 revenues of $422 million. "Lotus and Novell come together with successful heritages; each with leading products in their respective principal market, representing approximately 10 million Lotus users and 5 million Novell users. In addition, both companies are in the midst of strong product cycles. The synergy from a customer, sales and distribution standpoint and in terms of future product offerings is tremendous," Noorda said. "The merger combines two great companies which share a very similar strategy and focus," Manzi said. "Both Novell and Lotus are executing identical cross-platform strategies, both companies are heavily invested in networked and organizational computing, and we both believe customers will benefit from the complementary nature of our software offerings which, when combined, result in a strong suite of solutions meeting our customers needs. "In addition to leading the Novell unit, Ray Noorda will make significant contributions to Lotus by realizing the gains of this combination for our customers, employees and shareholders," Manzi said. The consummation of the merger is subject to the execution of a definitive merger agreement, approval of both companies' boards of directors and stockholders, customary regulatory approvals and normal conditions of closing. The parties are looking toward a closing in July 1990. Novell Inc., headquartered in Provo, is the leading provider of local area network server system software that integrates desktop computers, servers, and minicomputer and mainframe hosts for business-wide computing. Novell's NetWare network computing products manage and control the sharing of services, data and applications among PC workgroups, departmental networks and across business-wide information systems. The company's products support standards to integrate DOS, OS/2, MacIntosh and UNIX desktop computers with IBM, DEC and UNIX hosts. Lotus Development Corp., headquartered in Cambridge, Mass., is the leading provider of applications software for personal computers and information services delivered on CD-ROM, and is a worldwide supplier of applications software for workstations, minicomputers and mainframes. --30--cs/ix CONTACT: Novell Inc., Provo Jan Johnson, 801/429-5867 Peter Troop, 408/473-8361 Lotus Development Corp., Cambridge Richard Eckel, 617/225-1284 Heidi Sinclair, 617/225-1364 KEYWORD: MASSACHUSETTS UTAH R EPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-720-0012 or 800-225-2030; SF 415-986-4422 or 800-227-0845; LA 213-380-8383 !