Jack L. Messman

 

                                                                  

                               SEVERANCE AGREEMENT

 

      THIS SEVERANCE AGREEMENT (this "Agreement"), dated as of January 7, 2005,

is made and entered by and between Novell, Inc., a Delaware corporation (the

"Company"), and Jack L. Messman (the "Executive").

 

                                   WITNESSETH:

 

      WHEREAS, the Executive is a senior executive of the Company and has made

and is expected to continue to make major contributions to the short- and

long-term profitability, growth and financial strength of the Company;

 

      WHEREAS, the Executive currently has an employment agreement with the

Company, dated May 22, 2001, (the "Employment Agreement") that provides for the

payment of certain severance and the receipt of certain benefits in the event of

the termination of the Executive's employment;

 

      WHEREAS, the Board (as defined below) has determined that appropriate

alternative arrangements should be taken to encourage the continued attention

and dedication of Executive to his assigned duties without distraction;

 

      WHEREAS, in consideration of the Executive's continued employment with the

Company and the Executive's agreement to waive any rights he may have to receive

severance compensation and benefits under his Employment Agreement, the Company

desires to provide Executive with certain compensation and benefits set forth in

this Agreement in order to ameliorate the financial and career impact on

Executive in the event the Executive's employment with the Company is terminated

for a reason related to, or unrelated to, a Change in Control (as defined below)

of the Company; and

 

      WHEREAS, the Executive agrees to waive any rights he may have under his

Employment Agreement with respect to severance compensation and benefits.

 

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants

and agreements hereinafter set forth and intending to be legally bound hereby,

the Company and the Executive agree as follows:

 

      1. Certain Defined Terms. In addition to terms defined elsewhere herein,

the following terms have the following meanings when used in this Agreement with

initial capital letters:

 

            (a) "Base Pay" means the greater of (i) Executive's annual base

salary rate, exclusive of bonuses, commissions and other Incentive Pay, as in

effect immediately preceding Executive's Termination Date, or (ii) Executive's

highest annual base salary rate, exclusive of bonuses, commissions and other

Incentive Pay, as in effect in any of the three (3) full calendar years

preceding Executive's Termination Date.

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            (b)   "Board" means the Board of Directors of the Company.

 

            (c) "Cause" means a determination by the Board that Executive has

committed any of the following acts:

 

                  (i) the Executive has been convicted of a criminal violation

      involving fraud, embezzlement or theft in connection with his duties or in

      the course of his employment with the Company or any Subsidiary; or

 

                  (ii) the Executive has committed intentional wrongful

      disclosure of secret processes or confidential information of the Company

      or any Subsidiary; and any such act has been demonstrably and materially

      harmful to the Company. For purposes of this subsection (ii), no act on

      the part of the Executive will be deemed "intentional" if it was due

      primarily to an error in judgment or negligence, but will be deemed

      "intentional" if done by the Executive not in good faith and without

      reasonable belief that the Executive's action was in the best interest of

      the Company.

 

      Notwithstanding the foregoing, the Executive will not be deemed to have

      been terminated for "Cause" under this subsection (ii) unless and until

      there has been delivered to the Executive a copy of a resolution duly

      adopted by the affirmative vote of not less than three- quarters of the

      members of the Board then in office at a meeting of the Board, finding

      that, in the good faith opinion of the Board, the Executive has committed

      an act constituting "Cause," as herein defined, and specifying the

      particulars thereof in detail. Prior to any such determination, Executive

      shall be provided with reasonable notice of such pending determination and

      Executive, together with his counsel (if the Executive chooses to have

      counsel present at such meeting), shall be provided with the opportunity

      to be heard before the Board makes any such determination. Nothing herein

      will limit the right of the Executive or his beneficiaries to contest the

      validity or propriety of any such determination.

 

            (d) "Change in Control" means the occurrence of any of the following

events:

 

                  (i) the acquisition by any individual, entity or group (within

      the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act) (a

      "Person") of beneficial ownership (within the meaning of Rule 13d-3

      promulgated under the Exchange Act) of 25% or more of the combined voting

      power of the then outstanding Voting Stock of the Company; provided,

      however, that for purposes of this Section 1(d)(i), the following

      acquisitions will not constitute a Change in Control: (A) any issuance of

      Voting Stock of the Company directly from the Company that is approved by

      the Incumbent Board (as defined in Section 1(d)(ii), below), (B) any

      acquisition by the Company of Voting Stock of the Company, (C) any

      acquisition of Voting Stock of the Company by any employee benefit plan

      (or related trust) sponsored or maintained by the Company or any

      Subsidiary, or (D) any acquisition of Voting Stock of the Company by any

      Person pursuant to a

      Business Combination that complies with clauses (A), (B) and (C) of

      Section 1(d)(iii), below; and provided, further, that a Change in Control

      will not occur if any Person becomes the beneficial owner of 25% or more

      of the combined voting power of the Voting Stock of the Company solely as

      a result of an issuance of Voting Stock described in clause (A) of this

      Section 1(d)(i) or an acquisition of Voting Stock described in clause (B)

      of this Section 1(d)(i) unless and until such Person thereafter acquires

      beneficial ownership of Voting Stock of the Company that causes the

      aggregate percent of the combined voting power of the Voting Stock of the

      Company then owned beneficially by such Person to exceed the percent of

      the combined voting power of Voting Stock of the Company owned

      beneficially by such Person immediately after such issuance or acquisition

      described in clause (A) or (B) of this Section 1(d)(i); or

 

                  (ii) individuals who, as of the date hereof, constitute the

      Board (the "Incumbent Board," as modified by this Section 1(d)(ii)), cease

      for any reason to constitute at least a majority of the Board; provided,

      however, that any individual becoming a Director subsequent to the date

      hereof whose election, or nomination for election by the Company's

      stockholders, was approved by a vote of at least two-thirds of the

      Directors then comprising the Incumbent Board (either by a specific vote

      or by approval of the proxy statement of the Company in which such person

      is named as a nominee for director, without objection to such nomination)

      will be deemed to have then been a member of the Incumbent Board, but

      excluding, for this purpose, any such individual whose initial assumption

      of office occurs as a result of an actual or threatened election contest

      (within the meaning of Rule 14a-11 of the Exchange Act) with respect to

      the election or removal of Directors or other actual or threatened

      solicitation of proxies or consents by or on behalf of a Person other than

      the Board; or

 

                  (iii) consummation of a reorganization, merger or

      consolidation, a sale or other disposition of all or substantially all of

      the assets of the Company, or other transaction (each, a "Business

      Combination"), unless, in each case, immediately following such Business

      Combination, (A) all or substantially all of the individuals and entities

      who were the beneficial owners of Voting Stock of the Company immediately

      prior to such Business Combination beneficially own, directly or

      indirectly, more than 50% of the combined voting power of the then

      outstanding shares of Voting Stock of the entity resulting from such

      Business Combination (including, without limitation, an entity which as a

      result of such transaction owns the Company or all or substantially all of

      the Company's assets either directly or through one or more subsidiaries),

      (B) no Person (other than the Company; such entity resulting from such

      Business Combination; any employee benefit plan (or related trust)

      sponsored or maintained by the Company, any Subsidiary or such entity

      resulting from such Business Combination; or any Person who immediately

      prior to such Business Combination beneficially owned directly or

      indirectly 25% or more of the combined voting power of the voting stock of

      the Company and whose ownership of such Voting Stock did not result in a

      Change in Control under Section 1(d)(i)) beneficially owns, directly or

      indirectly, 25% or more of the combined voting power of the then

      outstanding

      shares of Voting Stock of the entity resulting from such Business

      Combination, and (C) at least a majority of the members of the Board of

      Directors of the entity resulting from such Business Combination were

      members of the Incumbent Board at the time of the execution of the initial

      agreement or of the action of the Board providing for such Business

      Combination; or

 

                  (iv) approval by the stockholders of the Company of a complete

      liquidation or dissolution of the Company, except pursuant to a Business

      Combination that complies with clauses (A), (B) and (C) of Section

      1(d)(iii).

 

            (e) "COBRA" means the Consolidated Omnibus Budget Reconciliation Act

of 1986, as amended.

 

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

 

            (g) "Constructive Termination Associated With a Change in Control"

means the termination of the Executive's employment with the Company by

Executive as a result of the occurrence of one of the following events as a

result of a Change in Control:

 

                  (i) without the Executive's express written consent, the

      failure to elect or reelect or otherwise to maintain the Executive in the

      office or the position, or an equivalent office or position, of or with

      the Company and/or a Subsidiary (or any successor thereto by operation of

      law of or otherwise), as the case may be, which the Executive held

      immediately prior to a Change in Control, or the removal of the Executive

      as a Director of the Company and/or a Subsidiary (or any successor

      thereto) if the Executive has been a Director of the Company and/or a

      Subsidiary immediately prior to the Change in Control;

 

                  (ii) without the Executive's express written consent, the

      failure of the Company to remedy any of the following within ten (10)

      business days after receipt by the Company of written notice thereof from

      the Executive: (A) an adverse change in the nature or scope of the

      authorities, powers, functions, responsibilities or duties attached to the

      position with the Company and any Subsidiary which the Executive held

      immediately prior to the Change in Control, (B) a reduction in the

      aggregate of the Executive's Base Pay and Incentive Pay, or (C) the

      termination or denial of the Executive's rights to Employee Benefits or a

      reduction in the scope or value thereof;

 

                  (iii) without the Executive's express written consent, a

      determination by the Executive (which determination will be conclusive and

      binding upon the parties hereto provided it has been made in good faith

      and in all events will be presumed to have been made in good faith unless

      otherwise shown by the Company by clear and convincing evidence) that a

      change in circumstances has occurred following a Change in Control,

      including, without limitation, a change in the scope of the business or

      other activities for which the Executive was responsible immediately prior

      to the Change in Control, which has

      rendered the Executive unable to carry out, has hindered the Executive's

      performance of, or has caused the Executive to suffer a reduction in, any

      of the authorities, powers, functions, responsibilities or duties attached

      to the position held by the Executive immediately prior to the Change in

      Control, which situation is not remedied within ten (10) business days

      after written notice to the Company from the Executive of such

      determination;

 

                  (iv) without the Executive's express written consent, the

      liquidation, dissolution, merger, consolidation or reorganization of the

      Company or transfer of all or substantially all of its business and/or

      assets, unless the successor or successors (by liquidation, merger,

      consolidation, reorganization, transfer or otherwise) to which all or

      substantially all of its business and/or assets have been transferred (by

      operation of law or otherwise) assumes all duties and obligations of the

      Company under this Agreement pursuant to Section 15(a);

 

                  (v) without the Executive's express written consent, a

      requirement by the Company that the Executive have his principal location

      of work changed to any location that is in excess of thirty-five (35)

      miles from the location thereof immediately prior to the Change in

      Control, or that the Executive travel away from his office in the course

      of discharging his responsibilities or duties hereunder at least 20% more

      (in terms of aggregate days in any calendar year or in any calendar

      quarter when annualized for purposes of comparison to any prior year) than

      was required of the Executive in any of the three (3) full years

      immediately prior to the Change in Control; or

 

                  (vi) without limiting the generality or effect of the

      foregoing, without the Executive's express written consent, any material

      breach of this Agreement by the Company or any successor thereto which is

      not remedied by the Company within ten (10) business days after receipt by

      the Company of written notice from the Executive of such breach.

 

      In no event shall the termination of Executive's employment with the

Company on account of the Executive's death or Disability or because the

Executive engaged in conduct constituting Cause be deemed to be a Constructive

Termination Associated With a Change in Control.

 

            (h) "Constructive Termination Prior to a Change in Control" means

the termination of Executive's employment with the Company by the Executive as a

result of:

 

                  (i) the failure to elect or reelect or otherwise to maintain

      the Executive as the President and Chief Executive Officer of the Company,

      or the removal of or failure to nominate the Executive as a Director of

      the Company (or any successor thereto);

 

                  (ii) the failure of the Company to remedy any of the following

      within thirty (30) calendar days after receipt by the Company of written

      notice

      thereof from the Executive: (A) a materially adverse change in the nature

      or scope of the authorities, powers, functions, responsibilities or duties

      attached to the Executive's position with the Company, (B) a reduction in

      Executive's Base Pay, unless pursuant to a voluntary reduction by

      Executive or a reduction affecting all senior Company management, (C) the

      termination or denial of the Executive's rights to Employee Benefits or a

      material reduction in the scope thereof unless pursuant to a reduction

      affecting all senior Company management, or (D) a reduction in Executive's

      Incentive Pay opportunity below 100% of the Executive's Base Pay, unless

      pursuant to a voluntary reduction by Executive or a reduction affecting

      all senior Company management;

 

                  (iii) a requirement by the Company that the Executive have his

      principal location of work changed to any location that is in excess of

      thirty-five (35) miles from the location thereof without his prior written

      consent; or

 

                  (iv) without limiting the generality or effect of the

      foregoing, any material breach of this Agreement by the Company or any

      successor thereto which is not remedied by the Company within 30 calendar

      days after receipt by such party of written notice from the Executive

      specifying the grounds for such breach in reasonable detail.

 

      In no event shall the termination of Executive's employment with the

      Company on account of the Executive's death or Disability or because the

      Executive engaged in conduct constituting Cause be deemed to be a

      Constructive Termination Prior to a Change in Control.

 

            (i) "Disability" means the Executive becomes permanently disabled

within the meaning of, and begins actually to receive disability benefits

pursuant to, the long-term disability plan in effect for, or applicable to, the

Executive.

 

            (j) "Employee Benefits" means the perquisites, benefits and service

credit for benefits as provided under any and all employee retirement income and

welfare benefit policies, plans, programs or arrangements in which the Executive

is entitled to participate, including, without limitation, any stock option,

performance share, performance unit, stock purchase, stock appreciation,

savings, pension, supplemental executive retirement, or other retirement income

or welfare benefit, deferred compensation, incentive compensation, group or

other life, health, medical/hospital or other insurance (whether funded by

actual insurance or self-insured by the Company or a Subsidiary), disability,

salary continuation, expense reimbursement and other employee benefit policies,

plans, programs or arrangements that may now exist or any equivalent successor

policies, plans, programs or arrangements that may be adopted hereafter by the

Company or a Subsidiary, providing perquisites, benefits and service credit for

benefits at least as great in the aggregate as are payable thereunder.

 

            (k) "Exchange Act" means the Securities Exchange Act of 1934, as

amended.

            (l) "Incentive Pay" means the greater of: (i) Executive's maximum

Target Bonus for which Executive was eligible during the period that includes

the Termination Date, or (ii) the highest aggregate bonus or incentive payment

paid to Executive during any of the three (3) full calendar years prior to his

Termination Date. For purposes of this definition, "Target Bonus" means the

annual bonus, incentive, commission or other sales incentive compensation, or

comparable incentive payment opportunity which, in the sole discretion of the

Company, is deemed to constitute a Target Bonus, in addition to Base Pay, for

which Executive was eligible to receive, but did not receive prior to his

Termination Date, in regard to services rendered in the year covered by

Executive's Termination Date and is to be made pursuant to any bonus, incentive,

profit-sharing, performance, discretionary pay or similar agreement, policy,

plan, program or arrangement (whether or not funded) of the Company or a

Subsidiary, or any successor thereto. For purposes of this definition,

"Incentive Pay" does not include any stock option, stock appreciation, stock

purchase, restricted stock or similar plan, program, arrangement or grant, one

time bonus or payment (including, but not limited to, any sign-on bonus), any

amounts contributed by the Company for the benefit of Executive to any qualified

or nonqualified deferred compensation plan, whether or not provided under an

arrangement described in the prior sentence, or any amounts designated by the

parties as amounts other than Incentive Pay.

 

            (m) "Involuntary Termination Associated With a Change in Control"

means the termination of Executive's employment related to a Change in Control:

(i) by the Company for any reason other than Cause, the Executive's death or the

Executive's Disability, or (ii) on account of a Constructive Termination

Associated with a Change in Control.

 

            (n) "Involuntary Termination Prior to a Change in Control" means the

termination of Executive's employment unrelated to a Change in Control: (i) by

the Company for any reason other than Cause, the Executive's death or the

Executive's Disability, or (ii) on account of a Constructive Termination Prior

to a Change in Control.

 

            (o)   "Restricted Business" means,

 

                  (i) if the Executive is entitled to severance benefits under

      this Agreement on account of an Involuntary Termination Prior to a Change

      in Control, (A) the design, development, manufacture, marketing or support

      of local or wide area network products, computer operating systems,

      applications products, software products or services that enable

      organizations to more effectively conduct business using the Web, or any

      other software products of the type designed, developed, manufactured,

      sold or supported by the Company or as proposed to be designed, developed,

      manufactured, sold or supported by the Company pursuant to a development

      project that is actually being pursued during the term of this Agreement;

      (B) any business that performs technology and consulting services that

      help businesses develop and accelerate their transition to Internet-based

      e-business solutions and processes, or management services that assist

      businesses in improving their operating processes; or (C) any business

      that

      competes directly or indirectly with the hardware, software or consulting

      businesses of the Company.

 

                  (ii) if the Executive is entitled to severance benefits under

      this Agreement on account of an Involuntary Termination Associated With a

      Change in Control, any business function with a direct competitor of the

      Company that is substantially similar to the business function performed

      by the Executive with the Company immediately prior to his Termination

      Date.

 

            (p) "Restricted Territory" means the counties, towns, cities or

states of any country in which the Company operates or does business.

 

            (q) "Severance Period" means the twelve (12) month period after the

Executive's Termination Date.

 

            (r) "Subsidiary" means any Company controlled affiliate.

 

            (s) "Termination Date" means the last day of Executive's employment

with the Company.

 

            (t) "Termination of Employment" means, except as provided in the

following sentence, the termination of Executive's active employment

relationship with the Company on account of an Involuntary Termination Prior to

a Change in Control or an Involuntary Termination Associated With a Change in

Control. For purposes of the non-solicitation provision of Section 11 of the

Agreement, the term "Termination of Employment" shall mean the termination of

Executive's employment relationship with the Company for any reason, including,

but not limited to, the Executive's Involuntary Termination Prior to a Change in

Control, Involuntary Termination Associated With a Change in Control, voluntary

termination, termination on account of Disability, or termination by the Company

for Cause.

 

            (u) "Voting Stock" means securities entitled to vote generally in

the election of directors.

 

      2. Termination Prior to a Change in Control.

 

            (a) Involuntary Termination Prior to a Change in Control. In the

event Executive's employment is terminated on account of an Involuntary

Termination Prior to a Change in Control, Executive shall be entitled to the

benefits provided in subsection (b) of this Section 2.

 

            (b) Compensation and Benefits Upon Involuntary Termination Prior to

a Change in Control. In the event a termination described in subsection (a) of

this Section 2 occurs, the Company shall pay and provide to the Executive after

his Termination Date:

 

                  (i) (A) 2 times Base Pay, plus (B) 2 times Incentive Pay, for

      the Severance Period, payable in equal installments, consistent with the

 

      Company's past payroll practices, commencing with the first payroll period

      that occurs after Executive's Termination Date. Notwithstanding the

      foregoing, the Executive may determine, in his sole discretion and at any

      time, that the amounts payable under this subsection (i) shall be paid to

      him in a lump sum, as opposed to installments over the Severance Period.

 

                  (ii) Executive shall receive his pro rated Incentive Pay for

      the year in which his Termination of Employment occurs. The pro rated

      Incentive Pay shall be based on the Executive's Incentive Pay for the year

      in which Executive's Termination Date occurs, multiplied by a fraction,

      the numerator of which is the number of days during which Executive was

      employed by the Company in the year of his termination and the denominator

      of which is 365. Such pro rated Incentive Pay shall be paid to Executive

      in equal installments over the Severance Period, consistent with the

      Company's past payroll practices, commencing with the first payroll period

      that occurs after Executive's Termination Date. Notwithstanding the

      foregoing, the Executive may determine, in his sole discretion and at any

      time, that the amounts payable under this subsection (ii) shall be paid to

      him in a lump sum, as opposed to installments over the Severance Period.

 

                  (iii) For a period of twelve (12) months following his

      Termination Date, Executive shall continue to receive the medical and

      dental coverage in effect on his Termination Date (or generally comparable

      coverage) for himself and, where applicable, his spouse and dependents, as

      the same may be changed from time to time for employees generally, as if

      Executive had continued in employment during such period; or, as an

      alternative, the Company may elect to pay Executive cash in lieu of such

      coverage in an amount equal to Executive's after-tax cost of continuing

      comparable coverage, where such coverage may not be continued by the

      Company (or where such continuation would adversely affect the tax status

      of the plan pursuant to which the coverage is provided). If the Executive

      does not receive the cash payment described in the preceding sentence, the

      Company shall take all commercially reasonable efforts to provide that the

      COBRA health care continuation coverage period under section 4980B of the

      Code, shall commence immediately after the foregoing twelve (12) month

      benefit period, with such continuation coverage continuing until the

      earlier of (i) the end of the applicable COBRA health care continuation

      coverage period or (ii) the date on which Executive is covered by the

      medical and dental coverage of his successor employer, if any.

 

                  (iv) With respect to any Company stock options held by the

      Executive as of the date of such Involuntary Termination Prior to a Change

      in Control, the Company shall accelerate the vesting of that portion of

      the Executive's stock options, if any, which would have vested and become

      exercisable within the one (1) year period after the Executive's

      Termination Date, such options, plus any other options that previously

      became exercisable and have not expired or been exercised, to remain

      exercisable, notwithstanding anything in any other agreement governing

      such options, for the longer of (A) a period of six

      (6) months after the Executive's Termination Date, or (B) the period set

      forth in the award agreement covering the option; provided, however, that

      in no event will the option be exercisable beyond its original term.

 

                  (v) With respect to any shares of Company common stock held by

      the Executive that are, at the time of such Involuntary Termination Prior

      to a Change in Control, subject to the Company's repurchase right upon

      termination of the Executive's employment ("Restricted Stock"), the

      Company shall waive such repurchase right as to the number of shares of

      Restricted Stock that would have vested within the one (1) year period

      after the Executive's Termination Date.

 

                  (vi) To cover the cost of outplacement assistance services for

      Executive that are actually provided by an outplacement agency selected by

      Executive, for which the Company provides prior approval, with such

      approval not to be unreasonably withheld, in an amount not to exceed

      twenty percent (20%) of the Executive's Base Pay.

 

                  (vii) Executive shall receive any amounts earned, accrued or

      owing but not yet paid to Executive as of his Termination Date, payable in

      a lump sum, and any benefits accrued or earned in accordance with the

      terms of any applicable benefit plans and programs of the Company.

 

      3.    Termination Associated With a Change in Control.

 

            (a) Involuntary Termination Associated With a Change in Control. In

the event Executive's employment is terminated after, or in connection with, a

Change in Control, on account of (i) an Involuntary Termination Associated With

a Change in Control within the two year period after the Change in Control, (ii)

an Involuntary Termination Associated With a Change in Control that occurs (A)

not more than six (6) months prior to the date on which a Change in Control

occurs or (B) following the commencement of any discussion with a third person

that ultimately results in a Change in Control, or (iii) voluntarily by the

Executive for any reason (other than for death, Disability, or under

circumstances in which the Executive engaged in conduct that would constitute

Cause) during the thirty (30) day period immediately following the first

anniversary of the first occurrence of a Change in Control, Executive shall be

entitled to the benefits provided in subsection (b) of this Section 3. If

Executive is entitled to benefits described in this Section 3 by reason of

clause (a)(ii) above, Executive shall receive the compensation and benefits

described in Section 2(b) above after his Termination of Employment, in

accordance with the provisions of Section 2(b), regardless of whether the Change

in Control actually occurs, and Executive shall receive the additional

compensation and benefits described in Section 3(b) below only if the Change in

Control is consummated and shall receive such additional amounts after the

consummation of the Change in Control, in accordance with the provisions of

Section 3(b) below. For purposes of subsection 3(a)(ii)(B) above, to be eligible

to receive amounts described in Section 3(b) below, the Change in Control must

be consummated within the twelve (12) month period following Executive's

Termination Date, except in circumstances pursuant to which the consummation of

the Change in Control is delayed,

through no failure of the Company or the third person, by a governmental or

regulatory authority or agency with jurisdiction over the matter, or as a result

of other similar circumstances. In such a circumstance, the remaining of the

twelve (12) month period shall be tolled and shall recommence upon termination

of the delaying event.

 

            (b) Compensation and Benefits Upon Involuntary Termination

Associated With a Change in Control. Subject to the provisions of Section 5

hereof, in the event a termination described in subsection (a) of this Section 3

occurs, the Company shall pay and provide to the Executive after his Termination

Date:

 

                  (i) Lump sum payment equal to (A) 3 times Base Pay, plus (B) 3

      times Incentive Pay. Payment shall be made within thirty (30) days after

      Executive's Termination Date (or the end of the revocation period for the

      Release, if later).

 

                  (ii) Executive shall receive his pro rated Incentive Pay for

      the year in which his Termination of Employment occurs. The pro rated

      Incentive Pay shall be based on the Executive's Incentive Pay for the year

      in which Executive's Termination Date occurs, multiplied by a fraction,

      the numerator of which is the number of days during which Executive was

      employed by the Company in the year of his termination and the denominator

      of which is 365. Such pro rated Incentive Pay shall be paid to Executive

      in a lump sum within thirty (30) days after the effective date of the

      termination (or the end of the revocation period for the Release, if

      later).

 

                  (iii) For a period of thirty-six (36) months following his

      Termination Date, Executive shall continue to receive the medical and

      dental coverage in effect on his Termination Date (or generally comparable

      coverage) for himself and, where applicable, his spouse and dependents, as

      the same may be changed from time to time for employees generally, as if

      Executive had continued in employment during such period; or, as an

      alternative, the Company may elect to pay Executive cash in lieu of such

      coverage in an amount equal to Executive's after-tax cost of continuing

      comparable coverage, where such coverage may not be continued by the

      Company (or where such continuation would adversely affect the tax status

      of the plan pursuant to which the coverage is provided). If the Executive

      does not receive the cash payment described in the preceding sentence, the

      Company shall take all commercially reasonable efforts to provide that the

      COBRA health care continuation coverage period under section 4980B of the

      Code, shall commence immediately after the foregoing thirty-six (36) month

      benefit period, with such continuation coverage continuing until the

      earlier of (i) the end of the applicable COBRA health care continuation

      coverage period or (ii) the date on which Executive is covered by the

      medical and dental coverage of his successor employer, if any.

 

                  (iv) Lump sum payment equal to the total amount that Executive

      would have received under the Company's 401(k) plan as a Company match if

      Executive was eligible to participate in the Company's 401(k) plan for

      the thirty-six (36) month period after his Termination Date and he

      contributed the maximum amount to the plan for the match. Payment shall be

      made within thirty (30) days after Executive's Termination Date (or the

      end of the revocation period for the Release, if later).

 

                  (v) Lump sum payment equal to the total premiums that the

      Company would have paid under Executive's split-dollar life insurance

      policy, if any, that is in effect immediately prior to his Termination

      Date, if Executive was employed by the Company for the thirty-six (36)

      month period following Executive's Termination Date; provided, however,

      that if the remaining length of the term of the split-dollar arrangement

      pursuant to which the Company must make premium payments is less than the

      foregoing thirty-six (36) month period, Executive shall only receive a

      lump sum payment equal to the remaining Company premiums for the term of

      the arrangement. Payment shall be made within thirty (30) days after

      Executive's Termination Date (or the end of the revocation period for the

      Release, if later). Notwithstanding the foregoing, no payment shall be

      made to Executive pursuant to this subsection (v) if on the Executive's

      Termination Date, either Executive does not have a split-dollar life

      insurance policy with the Company or the Company has no obligations to

      make premium contributions to Executive's split-dollar life insurance

      policy.

 

                  (vi) Lump sum payment equal to twenty percent (20%) of the

      Executive's Base Pay in order to cover the cost of outplacement assistance

      services for Executive. Payment shall be made within thirty (30) days

      after Executive's Termination Date (or the end of the revocation period

      for the Release, if later).

 

                  (vii) Executive shall receive any amounts earned, accrued or

      owing but not yet paid to Executive as of his Termination Date, payable in

      a lump sum, and any benefits accrued or earned in accordance with the

      terms of any applicable benefit plans and programs of the Company.

 

            (c) Notwithstanding any provision to the contrary in any applicable

plan, program or agreement, upon the occurrence of a Change in Control, all

stock options, Restricted Stock and other equity rights held by the Executive

will become fully vested and/or exercisable, as the case may be, on the date on

which the Change in Control occurs, and all stock options held by the Executive

shall remain exercisable, notwithstanding anything in any other agreement

governing such options, for the longer of (i) a period of thirty-six (36) months

after the Executive's Termination Date, or (ii) the period set forth in the

award agreement covering the option; provided, however, that in no event will

the option be exercisable beyond its original term.

 

      4. Termination of Employment on Account of Disability, Cause or Death.

Notwithstanding anything in this Agreement to the contrary, if Executive's

employment terminates on account of Disability, Executive shall be entitled to

receive disability benefits under any disability program maintained by the

Company that covers Executive, and Executive shall not be considered to have

terminated employment under this

Agreement and shall not receive benefits pursuant to Sections 2 and 3 hereof. If

Executive's employment terminates on account of Cause or because of his death,

Executive shall not be considered to have terminated employment under this

Agreement and shall not receive benefits pursuant to Sections 2 and 3 hereof.

 

      5. Release. Notwithstanding the foregoing, no payments shall be made or

benefits provided under Section 3(b) unless Executive executes, and does not

revoke, the Company's standard written release, substantially in the form as

attached hereto as Annex A, (the "Release"), of any and all claims against the

Company and all related parties with respect to all matters arising out of

Executive's employment by the Company (other than entitlements under the terms

of this Agreement or under any other plans or programs of the Company in which

Executive participated and under which Executive has accrued or become entitled

to a benefit) or a termination thereof.

 

      6. Enforcement. Without limiting the rights of the Executive at law or in

equity, if the Company fails to make any payment or provide any benefit required

to be made or provided hereunder on a timely basis, the Company will pay

interest on the amount or value thereof at an annualized rate of interest equal

to the so- called composite "prime rate" as quoted from time to time during the

relevant period in the Eastern Edition of The Wall Street Journal. Such interest

will be payable as it accrues on demand. Any change in such prime rate will be

effective on and as of the date of such change.

 

      7. Certain Additional Payments by the Company.

 

            (a) The provisions of this Section 7 shall apply notwithstanding

anything in this Agreement to the contrary. Subject to subsection (b) below, in

the event that it shall be determined that any payment or distribution by the

Company to or for the benefit of Executive, whether paid or payable or

distributed or distributable pursuant to the terms of this Agreement or

otherwise (a "Payment"), would constitute an "excess parachute payment" within

the meaning of section 280G of the Code, the Company shall pay Executive an

additional amount (the "Gross-Up Payment") such that the net amount retained by

Executive after deduction of any excise tax imposed under section 4999 of the

Code, and any federal, state and local income tax, employment tax, excise tax

and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment.

 

            (b) Notwithstanding subsection (a), and notwithstanding any other

provisions of this Agreement to the contrary, if the net after-tax benefit to

Executive of receiving the Gross-Up Payment does not exceed the Safe Harbor

Amount (as defined below) by more than 10% (as compared to the net-after tax

benefit to Executive resulting from elimination of the Gross-Up Payment and

reduction of the Payments to the Safe Harbor Amount), then (i) the Company shall

not pay Executive the Gross-Up Payment and (ii) the provisions of subsection (c)

below shall apply. The term "Safe Harbor Amount" means the maximum dollar amount

of parachute payments that may be paid under section 280G of the Code without

imposition of an excise tax under section 4999 of the Code.

            (c) The provisions of this subsection (c) shall apply only if the

Company is not required to pay Executive a Gross-Up Payment as a result of

subsection (b) above. If the Company is not required to pay Executive a Gross-Up

Payment as a result of the provisions of subsection (b), the Company will apply

a limitation on the Payment amount as set forth in subsection (i) below (a

"Parachute Cap") if the application of the Parachute Cap is beneficial to

Executive, according to the following provisions:

 

                  (i) If subsection (ii) does not apply, the aggregate present

      value of the Payments under Section 3 of this Agreement ("Agreement

      Payments") shall be reduced (but not below zero) to the Reduced Amount.

      The "Reduced Amount" shall be an amount expressed in present value which

      maximizes the aggregate present value of Agreement Payments without

      causing any Payment to be subject to the limitation of deduction under

      section 280G of the Code. For purposes of this Section 7, "present value"

      shall be determined in accordance with section 280G(d)(4) of the Code.

 

                  (ii) It is the intention of the parties that the Parachute Cap

      apply only if application of the Parachute Cap is beneficial to Executive.

      Therefore, if the net amount that would be retained by Executive under

      this Agreement without the Parachute Cap, after payment of any excise tax

      under section 4999 of the Code, exceeds the net amount that would be

      retained by Executive with the Parachute Cap, then the Company shall not

      apply the Parachute Cap to Executive's payments. In that event, neither

      the Parachute Cap nor the Gross-Up Payment will apply to Executive.

 

            (d) All determinations to be made under this Section 7 shall be made

by the nationally recognized independent public accounting firm used by the

Company immediately prior to the Change in Control ("Accounting Firm"), which

Accounting Firm shall provide its determinations and any supporting calculations

to the Company and Executive within ten days of Executive's termination date. If

any Gross-Up Payment is required to be made, the Company shall make the Gross-Up

Payment within ten days after receiving the Accounting Firm's calculations. Any

such determination by the Accounting Firm shall be binding upon the Company and

Executive.

 

            (e) All of the fees and expenses of the Accounting Firm in

performing the determinations referred to in this Section 7 shall be borne

solely by the Company.

 

      8. No Mitigation Obligation. The Company hereby acknowledges that it will

be difficult and may be impossible for the Executive to find reasonably

comparable employment following the Termination Date. Accordingly, the payment

of the severance compensation by the Company to the Executive in accordance with

the terms of this Agreement is hereby acknowledged by the Company to be

reasonable, and the Executive will not be required to mitigate the amount of any

payment provided for in this Agreement by seeking other employment or otherwise,

nor will any profits, income, earnings or other benefits from any source

whatsoever create any mitigation, offset, reduction or any other obligation on

the part of the Executive hereunder or otherwise.

 

 

      9. Legal Fees and Expenses. In the event of a Change in Control, it is the

intent of the Company that the Executive not be required to incur legal fees and

the related expenses associated with the interpretation, enforcement or defense

of the Executive's rights under this Agreement by litigation or otherwise

because the cost and expense thereof would detract from the benefits intended to

be extended to the Executive hereunder. Accordingly, if a Change in Control

occurs and it should appear to the Executive that the Company has failed to

comply with any of its obligations under this Agreement or in the event that the

Company or any other person takes or threatens to take any action to declare

this Agreement void or unenforceable, or institutes any litigation or other

action or proceeding designed to deny, or to recover from, the Executive the

benefits provided or intended to be provided to the Executive under Section 3(b)

of the Agreement, the Company irrevocably authorizes the Executive from time to

time to retain counsel of the Executive's choice, at the expense of the Company

as hereafter provided, to advise and represent the Executive in connection with

any such interpretation, enforcement or defense, including without limitation

the initiation or defense of any litigation or other legal action, whether by or

against the Company or any Director, officer, stockholder or other person

affiliated with the Company, in any jurisdiction. Notwithstanding any existing

or prior attorney-client relationship between the Company and such counsel, the

Company irrevocably consents to the Executive's entering into an attorney-client

relationship with such counsel, and in that connection the Company and the

Executive agree that a confidential relationship will exist between the

Executive and such counsel. Without respect to whether the Executive prevails,

in whole or in part, in connection with any of the foregoing, the Company will

pay and be solely financially responsible for any and all attorneys' and related

fees and expenses incurred by the Executive in connection with any of the

foregoing; provided that, in regard to such matters, the Executive has not acted

frivolously, in bad faith or with no colorable claim of success. Such expenses

will be paid by the Company as they are incurred by Executive.

 

      10. Confidentiality. The Executive hereby covenants and agrees that he

will not disclose to any person not employed by the Company, or use in

connection with engaging in competition with the Company, any confidential or

proprietary information (as defined below) of the Company. For purposes of this

Agreement, the term "confidential or proprietary information" will include all

information of any nature and in any form that is owned by the Company and that

is not publicly available (other than by the Executive's breach of this Section

10) or generally known to persons engaged in businesses similar or related to

those of the Company. Confidential or proprietary information will include,

without limitation, the Company's financial matters, customers, employees,

industry contracts, strategic business plans, product development (or other

proprietary product data), marketing plans, consulting solutions and processes,

and all other secrets and all other information of a confidential or proprietary

nature which is protected by the Uniform Trade Secrets Act. For purposes of the

preceding two sentences, the term "Company" will also include any Subsidiary

(collectively, the "Restricted Group"). The foregoing obligations imposed by

this Section 10 will not apply (i) in the course of the business of and for the

benefit of the Company, (ii) if such confidential or proprietary information has

become, through no fault of the Executive, generally known to the public, or

(iii) if the Executive is required by law to make

disclosure (after giving the Company notice and an opportunity to contest such

requirement).

 

      11. Covenants Not to Compete and Not to Solicit. In the event of

Executive's Termination of Employment, the Company's obligations to provide

severance pay as provided in Sections 2 and 3 shall be expressly conditioned

upon the Executive's covenants not to compete and not to solicit as provided

herein. In the event the Executive breaches his obligations to the Company as

provided herein, the Company's obligations to make severance payments to

Executive pursuant to Sections 2 and 3 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

Executive's Termination Date, the Executive 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 Board. 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.

 

                  (i) If Executive is receiving compensation and benefits under

      Section 2(b) above, then, for a period of one (1) year following

      Executive's Termination Date, Executive shall not: (i) solicit, encourage

      or take any other action which is intended to induce any other employee of

      the Company to terminate his 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 Executive or any entity with which Executive 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.

 

                  (ii) If Executive is receiving compensation and benefits under

      Section 3(b) above (or subsequently becomes entitled to severance under

      section 3(b) above because of a termination described in Section

      3(a)(ii)), then, for a period of two (2) years following Executive's

      Termination Date, Executive shall not: (i) solicit, encourage or take any

      other action which is intended to induce any other employee of the Company

      to terminate his 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

      Executive or any entity with which Executive 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, town, 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 subsections. If, in any

judicial proceeding, the court shall refuse to enforce any of the separate

covenants (or any part thereof) deemed included in such subsections, then such

unenforceable covenant (or such part) shall be deemed to be 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) Reasonableness. In the event that the provisions of this Section

11 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.

 

      12. Employment Rights. Nothing expressed or implied in this Agreement will

create any right or duty on the part of the Company or the Executive to have the

Executive remain in the employment of the Company or any Subsidiary prior to or

following any Change in Control.

 

      13. Withholding of Taxes. The Company may withhold from any amounts

payable under this Agreement all federal, state, city or other taxes as the

Company is required to withhold pursuant to any applicable law, regulation or

ruling.

 

      14. Term of Agreement. This Agreement shall continue in full force and

effect for the duration of Executive's employment with the Company; provided,

however, that after the termination of Executive's employment during the term of

this Agreement, this Agreement shall remain in effect until all of the

obligations of the parties hereunder are satisfied or have expired.

 

      15. Successors and Binding Agreement.

 

            (a) The Company will require any successor (whether direct or

indirect, by purchase, merger, consolidation, reorganization or otherwise) to

all or substantially all of the business or assets of the Company, by agreement

in form and substance reasonably satisfactory to the Executive, expressly to

assume and agree to perform this Agreement in the same manner and to the same

extent the Company would be required to perform if no such succession had taken

place. This Agreement will be binding upon and inure to the benefit of the

Company and any successor to the Company, including without limitation any

persons acquiring directly or indirectly all or substantially all of the

business or assets of the Company whether by purchase, merger, consolidation,

reorganization or otherwise (and such successor will thereafter be deemed the

"Company" for the purposes of this Agreement), but will not otherwise be

assignable, transferable or delegable by the Company.

 

            (b) This Agreement will inure to the benefit of and be enforceable

by the Executive's personal or legal representatives, executors, administrators,

successors,

heirs, distributees and legatees. This Agreement will supersede the provisions

of any employment or other agreement between the Executive and the Company that

relate to any matter that is also the subject of this Agreement, and such

provisions in such other agreements will be null and void.

 

            (c) This Agreement is personal in nature and neither of the parties

hereto will, without the consent of the other, assign, transfer or delegate this

Agreement or any rights or obligations hereunder except as expressly provided in

Sections 15(a) and 15(b). Without limiting the generality or effect of the

foregoing, the Executive's right to receive payments hereunder will not be

assignable, transferable or delegable, whether by pledge, creation of a security

interest, or otherwise, other than by a transfer by the Executive's will or by

the laws of descent and distribution and, in the event of any attempted

assignment or transfer contrary to this Section 15(c), the Company will have no

liability to pay any amount so attempted to be assigned, transferred or

delegated.

 

      16. Notices. For all purposes of this Agreement, all communications,

including without limitation notices, consents, requests or approvals, required

or permitted to be given hereunder will be in writing and will be deemed to have

been duly given when hand delivered or dispatched by electronic facsimile

transmission (with receipt thereof orally confirmed by the recipient), or five

(5) business days after having been mailed by United States registered or

certified mail, return receipt requested, postage prepaid, or three (3) business

days after having been sent by a nationally recognized courier service for

overnight/next-day delivery, such as FedEx, UPS, or the United States Postal

Service, addressed to the Company (to the attention of the Secretary of the

Company) at its principal executive office and to the Executive at his principal

residence, or to such other address as any party may have furnished to the other

in writing and in accordance herewith, except that notices of changes of address

will be effective only upon receipt.

 

      17. Governing Law. The validity, interpretation, construction and

performance of this Agreement will be governed by and construed in accordance

with the substantive laws of the Commonwealth of Massachusetts, without giving

effect to the principles of conflict of laws of such Commonwealth.

 

      18. Validity. If any provision of this Agreement or the application of any

provision hereof to any person or circumstances is held invalid, unenforceable

or otherwise illegal, the remainder of this Agreement and the application of

such provision to any other person or circumstances will not be affected, and

the provision so held to be invalid, unenforceable or otherwise illegal will be

reformed to the extent (and only to the extent) necessary to make it

enforceable, valid or legal.

 

      19. Miscellaneous. No provision of this Agreement may be modified, waived

or discharged unless such waiver, modification or discharge is agreed to in

writing signed by the Executive and the Company. No waiver by either party

hereto at any time of any breach by the other party hereto or compliance with

any condition or provision of this Agreement to be performed by such other party

will be deemed a waiver of similar or dissimilar provisions or conditions at the

same or at any prior or subsequent time. No

agreements or representations, oral or otherwise, expressed or implied with

respect to the subject matter hereof have been made by either party that are not

set forth expressly in this Agreement. References to Sections are to references

to Sections of this Agreement. Any reference in this Agreement to a provision of

a statute, rule or regulation will also include any successor provision thereto.

Whenever used herein, the masculine includes the feminine.

 

      20. Survival. Notwithstanding any provision of this Agreement to the

contrary, the parties' respective rights and obligations under Sections 2, 3, 7,

9, 10, and 11 will survive any termination or expiration of this Agreement or

the termination of the Executive's employment for any reason whatsoever.

 

      21. Counterparts. This Agreement may be executed in one or more

counterparts, each of which will be deemed to be an original but all of which

together will constitute one and the same agreement.

 

                            [SIGNATURE PAGE FOLLOWS]

 

 

                                       19

<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly

executed and delivered as of the date first above written.

 

NOVELL, INC.

 

By:

 

/s/ Alan J. Friedman

 

Name: Alan J. Friedman

Title:  Senior Vice President, People

 

EXECUTIVE

 

/s/ Jack L. Messman

 

Jack L. Messman

 

                                                                         Annex A

 

             SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE

 

      THIS SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the

"Agreement") is made as of this ___ day of __________, ____, by and between

Novell, Inc. (the "Company") and _______________ ("Executive").

 

      WHEREAS, Executive formerly was employed by the Company as ________;

 

      WHEREAS, Executive and Company entered into the Severance Agreement, dated

____ ____, 200_, (the "Severance Agreement") which provides for certain benefits

in the event that Executive's employment is terminated on account of a reason

set forth in the Severance Agreement;

 

      WHEREAS, Executive and the Company mutually desire to terminate

Executive's employment on an amicable basis, such termination to be effective

_________ ____, ____ ("Date of Resignation"); and

 

      WHEREAS, in connection with the termination of Executive's employment, the

parties have agreed to a separation package and the resolution of any and all

disputes between them.

 

      NOW, THEREFORE, IT IS HEREBY AGREED by and between Executive and the

Company as follows:

 

      1. (a) Executive, for and in consideration of the commitments of the

Company as set forth in paragraph 6 of this Agreement, and intending to be

legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company,

its affiliates, subsidiaries and parents, and its officers, directors,

employees, and agents, and its and their respective successors and assigns,

heirs, executors, and administrators (collectively, "Releasees") from all causes

of action, suits, debts, claims and demands whatsoever in law or in equity,

which Executive ever had, now has, or hereafter may have, whether known or

unknown, or which Executive's heirs, executors, or administrators may have, by

reason of any matter, cause or thing whatsoever, from the beginning of

Executive's employment to the date of this Agreement, and particularly, but

without limitation of the foregoing general terms, any claims arising from or

relating in any way to Executive's employment relationship with the Company, the

terms and conditions of that employment relationship, and the termination of

that employment relationship, including, but not limited to, any claims arising

under the Age Discrimination in Employment Act, the Older Workers Benefit

Protection Act, Title VII of The Civil Rights Act of 1964, the Americans with

Disabilities Act, the Family and Medical Leave Act of 1993, the Employee

Retirement Income Security Act of 1974, [STATE FAIR EMPLOYMENT PRACTICE LAW],

and any other claims under any federal, state or local common law, statutory, or

regulatory provision, now or hereafter recognized, and

 

any claims for attorneys' fees and costs. This Agreement is effective without

regard to the legal nature of the claims raised and without regard to whether

any such claims are based upon tort, equity, implied or express contract or

discrimination of any sort.

 

            (b) To the fullest extent permitted by law, and subject to the

provisions of paragraph 11 below, Executive represents and affirms that (i)

[OTHER THAN _______,] Executive has not filed or caused to be filed on

Executive's behalf any claim for relief against the Company or any Releasee and,

to the best of Executive's knowledge and belief, no outstanding claims for

relief have been filed or asserted against the Company or any Releasee on

Executive's behalf; (ii) [OTHER THAN _______,] Executive has not reported any

improper, unethical or illegal conduct or activities to any supervisor, manager,

department head, human resources representative, agent or other representative

of the Company, to any member of the Company's legal or compliance departments,

or to the ethics hotline, and has no knowledge of any such improper, unethical

or illegal conduct or activities; and (iii) Executive will not file, commence,

prosecute or participate in any judicial or arbitral action or proceeding

against the Company or any Releasee based upon or arising out of any act,

omission, transaction, occurrence, contract, claim or event existing or

occurring on or before the date of this Agreement.

 

      2. The Company, for and in consideration of the commitments of the

Executive as set forth in this Agreement, and intending to be legally bound,

does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Executive from all claims,

demands or causes of action arising out of facts or occurrences prior to the

date of this Agreement, but only to the extent the Company knows or reasonably

should know of such facts or occurrence and only to the extent such claim,

demand or cause of action relates to a violation of applicable law or the

performance of Executive's duties with the Company; provided, however, that this

release of claims shall not in any case be effective with respect to any claim

by the Company alleging a breach of the Executive's obligations under this

Agreement.

 

      3. In consideration of the Company's agreements as set forth in paragraph

6 herein, Executive agrees to be comply with the limitations described in

Sections 10 and 11 of the Severance Agreement.

 

      4. Executive further agrees and recognizes that Executive has permanently

and irrevocably severed Executive's employment relationship with the Company,

that Executive shall not seek employment with the Company or any affiliated

entity at any time in the future, and that the Company has no obligation to

employ him in the future.

 

      5. Executive further agrees that Executive will not disparage or subvert

the Company, or make any statement reflecting negatively on the Company, its

affiliated corporations or entities, or any of their officers, directors,

employees, agents or representatives, including, but not limited to, any matters

relating to the operation or management of the Company, Executive's employment

and the termination of Executive's employment, irrespective of the truthfulness

or falsity of such statement.

 

 

      6. In consideration for Executive's agreement as set forth herein, the

Company agrees:

 

            (i) [TO PAY TO EXECUTIVE A LUMP SUM PAYMENT EQUAL TO (A) 3 TIMES

BASE PAY (AS DEFINED IN THE SEVERANCE AGREEMENT), PLUS (B) 3 TIMES INCENTIVE PAY

(AS DEFINED IN THE SEVERANCE AGREEMENT). PAYMENT SHALL BE MADE WITHIN THIRTY

(30) DAYS AFTER THE EFFECTIVE DATE OF EXECUTIVE'S DATE OF RESIGNATION (OR THE

END OF THE REVOCATION PERIOD SET FORTH IN THIS AGREEMENT, IF LATER).

 

            (ii) TO PAY EXECUTIVE EXECUTIVE'S PRO RATED INCENTIVE PAY (AS

DEFINED IN THE SEVERANCE AGREEMENT) FOR THE YEAR IN WHICH EXECUTIVE'S DATE OF

RESIGNATION OCCURS. SUCH PRO RATED INCENTIVE PAY SHALL BE PAID TO EXECUTIVE IN A

LUMP SUM WITHIN THIRTY (30) DAYS AFTER THE EFFECTIVE DATE OF THE TERMINATION (OR

THE END OF THE REVOCATION PERIOD SET FORTH IN THIS AGREEMENT, IF LATER).

 

            (iii) [FOR A PERIOD OF THIRTY-SIX (36) MONTHS FOLLOWING EXECUTIVE'S

DATE OF RESIGNATION, EXECUTIVE SHALL CONTINUE TO RECEIVE THE MEDICAL AND DENTAL

COVERAGE IN EFFECT ON EXECUTIVE'S DATE OF RESIGNATION (OR GENERALLY COMPARABLE

COVERAGE) FOR EXECUTIVE AND, WHERE APPLICABLE, EXECUTIVE'S SPOUSE AND

DEPENDENTS, AS THE SAME MAY BE CHANGED FROM TIME TO TIME FOR EMPLOYEES

GENERALLY, AS IF EXECUTIVE HAD CONTINUED IN EMPLOYMENT DURING SUCH PERIOD] OR

[PAY EXECUTIVE CASH IN A LUMP SUM PAYMENT EQUAL TO EXECUTIVE'S AFTER-TAX COST OF

CONTINUING COMPARABLE MEDICAL AND DENTAL COVERAGE FOR THE THIRTY-SIX (36) MONTH

PERIOD FOLLOWING EXECUTIVE'S DATE OF RESIGNATION.] [THE COMPANY SHALL TAKE ALL

COMMERCIALLY REASONABLE EFFORTS TO PROVIDE THAT THE COBRA HEALTH CARE

CONTINUATION COVERAGE PERIOD UNDER SECTION 4980B OF THE CODE, SHALL COMMENCE

IMMEDIATELY AFTER THE FOREGOING THIRTY-SIX (36) MONTH BENEFIT PERIOD, WITH SUCH

CONTINUATION COVERAGE CONTINUING UNTIL THE EARLIER OF (I) THE END OF THE

APPLICABLE COBRA HEALTH CARE CONTINUATION COVERAGE PERIOD OR (II) THE DATE ON

WHICH EXECUTIVE IS COVERED BY THE MEDICAL AND DENTAL COVERAGE OF EXECUTIVE'S

SUCCESSOR EMPLOYER, IF ANY.]

 

            (iv) TO PAY TO EXECUTIVE A LUMP SUM PAYMENT EQUAL TO THE TOTAL

AMOUNT THAT EXECUTIVE WOULD HAVE RECEIVED UNDER THE COMPANY'S 401(K) PLAN AS A

COMPANY MATCH IF EXECUTIVE WAS ELIGIBLE TO PARTICIPATE IN THE COMPANY'S 401(K)

PLAN FOR THE THIRTY-SIX (36) MONTH PERIOD AFTER EXECUTIVE'S DATE OF RESIGNATION

AND EXECUTIVE CONTRIBUTED THE MAXIMUM AMOUNT TO THE PLAN FOR THE MATCH. PAYMENT

SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE EXECUTIVE'S DATE OF RESIGNATION

(OR THE END OF THE REVOCATION PERIOD SET FORTH IN THIS AGREEMENT, IF LATER).

 

            (v) [TO PAY TO EXECUTIVE A LUMP SUM PAYMENT EQUAL TO THE TOTAL

PREMIUMS THAT THE COMPANY WOULD HAVE PAID UNDER EXECUTIVE'S SPLIT-DOLLAR LIFE

INSURANCE POLICY, IF ANY, THAT IS IN EFFECT IMMEDIATELY PRIOR TO EXECUTIVE'S

DATE OF RESIGNATION, IF EXECUTIVE WAS EMPLOYED BY THE COMPANY FOR THE THIRTY-SIX

(36) MONTH PERIOD FOLLOWING EXECUTIVE'S DATE OF RESIGNATION. PAYMENT SHALL BE

MADE WITHIN THIRTY (30) DAYS AFTER THE EFFECTIVE DATE OF EXECUTIVE'S DATE OF

RESIGNATION (OR THE END OF THE REVOCATION PERIOD SET FORTH IN THIS AGREEMENT, IF

LATER)]. [NOTE: THE FOREGOING ONLY APPLIES IF EXECUTIVE HAS A SPLIT-DOLLAR

ARRANGEMENT WITH THE COMPANY AND THE COMPANY IS REQUIRED TO MAKE PREMIUM

CONTRIBUTIONS ON EXECUTIVE'S DATE OF

RESIGNATION. THE TOTAL MONTHS COVERED BY THE PREMIUMS WILL BE REDUCED IF THE

TERM OF THE POLICY IS SHORTER THAN THAT PROVIDED FOR EXECUTIVE.]

 

            (vi) TO PAY TO EXECUTIVE A LUMP SUM PAYMENT EQUAL TO TWENTY PERCENT

(20%) OF THE EXECUTIVE'S BASE PAY IN ORDER TO COVER THE COST OF OUTPLACEMENT

ASSISTANCE SERVICES FOR EXECUTIVE. PAYMENT SHALL BE MADE WITHIN THIRTY (30) DAYS

AFTER THE EFFECTIVE DATE OF EXECUTIVE'S DATE OF RESIGNATION (OR THE END OF THE

REVOCATION PERIOD SET FORTH IN THIS AGREEMENT, IF LATER).

 

            (vii) EXECUTIVE SHALL RECEIVE ANY AMOUNTS EARNED, ACCRUED OR OWING

BUT NOT YET PAID TO EXECUTIVE AS OF EXECUTIVE'S DATE OF RESIGNATION, PAYABLE IN

A LUMP SUM, AND ANY BENEFITS ACCRUED OR EARNED IN ACCORDANCE WITH THE TERMS OF

ANY APPLICABLE BENEFIT PLANS AND PROGRAMS OF THE COMPANY.

 

EXCEPT AS SET FORTH IN THIS AGREEMENT, IT IS EXPRESSLY AGREED AND UNDERSTOOD

THAT RELEASEES DO NOT HAVE, AND WILL NOT HAVE, ANY OBLIGATIONS TO PROVIDE

EXECUTIVE AT ANY TIME IN THE FUTURE WITH ANY PAYMENTS, BENEFITS OR

CONSIDERATIONS OTHER THAN THOSE RECITED IN THIS PARAGRAPH, OR THOSE REQUIRED BY

LAW, OTHER THAN UNDER THE TERMS OF ANY BENEFIT PLANS WHICH PROVIDE BENEFITS OR

PAYMENTS TO FORMER EMPLOYEES ACCORDING TO THEIR TERMS.]

 

      7. Executive understands and agrees that the payments, benefits and

agreements provided in this Agreement are being provided to him in consideration

for Executive's acceptance and execution of, and in reliance upon Executive's

representations in, this Agreement. Executive acknowledges that if Executive had

not executed this Agreement containing a release of all claims against the

Company, Executive would only have been entitled to the payments provided in the

Company's standard severance pay plan for employees.

 

      8. Executive acknowledges and agrees that the Company previously has

satisfied any and all obligations owed to him under any employment agreement or

offer letter Executive has with the Company and, further, that this Agreement

supersedes any employment agreement or offer letter Executive has with the

Company, and any and all prior agreements or understandings, whether written or

oral, between the parties shall remain in full force and effect to the extent

not inconsistent with this Agreement, and further, that, except as set forth

expressly herein, no promises or representations have been made to him in

connection with the termination of Executive's employment agreement, if any, or

offer letter, if any, with the Company, or the terms of this Agreement.

 

      9. Executive agrees not to disclose the terms of this Agreement to anyone,

except Executive's spouse, attorney and, as necessary, tax/financial advisor.

Likewise, the Company agrees that the terms of this Agreement will not be

disclosed except as may be necessary to obtain approval or authorization to

fulfill its obligations hereunder or as required by law. It is expressly

understood that any violation of the confidentiality obligation imposed

hereunder constitutes a material breach of this Agreement.

 

      10. Executive represents that Executive does not presently have in

Executive's possession any records and business documents, whether on computer

or hard copy, and other materials (including but not limited to computer disks

and tapes, computer programs and software, office keys, correspondence, files,

customer lists, technical information, customer information, pricing

information, business strategies and plans, sales records and all copies

thereof) (collectively, the "Corporate Records") provided by the Company and/or

its predecessors, subsidiaries or affiliates or obtained as a result of

Executive's prior employment with the Company and/or its predecessors,

subsidiaries or affiliates, or created by Executive while employed by or

rendering services to the Company and/or its predecessors, subsidiaries or

affiliates. Executive acknowledges that all such Corporate Records are the

property of the Company. In addition, Executive shall promptly return in good

condition any and all Company owned equipment or property, including, but not

limited to, automobiles, personal data assistants, facsimile machines, copy

machines, pagers, credit cards, cellular telephone equipment, business cards,

laptops and computers. As of the Date of Resignation, the Company will make

arrangements to remove, terminate or transfer any and all business communication

lines including network access, cellular phone, fax line and other business

numbers.

 

      11. Nothing in this Agreement shall prohibit or restrict Executive from:

(i) making any disclosure of information required by law; (ii) providing

information to, or testifying or otherwise assisting in any investigation or

proceeding brought by, any federal regulatory or law enforcement agency or

legislative body, any self-regulatory organization, or the Company's [DESIGNATED

LEGAL, COMPLIANCE OR HUMAN RESOURCES OFFICERS]; or (iii) filing, testifying,

participating in or otherwise assisting in a proceeding relating to an alleged

violation of any federal, state or municipal law relating to fraud, or any rule

or regulation of the Securities and Exchange Commission or any self-regulatory

organization.

 

      12. The parties agree and acknowledge that the agreement by the Company

described herein, and the settlement and termination of any asserted or

unasserted claims against the Releasees, are not and shall not be construed to

be an admission of any violation of any federal, state or local statute or

regulation, or of any duty owed by any of the Releasees to Executive.

 

      13. Executive agrees and recognizes that should Executive breach any of

the obligations or covenants set forth in this Agreement, the Company will have

no further obligation to provide Executive with the consideration set forth

herein, and will have the right to seek repayment of all consideration paid up

to the time of any such breach. Further, Executive acknowledges in the event of

a breach of this Agreement, Releasees may seek any and all appropriate relief

for any such breach, including equitable relief and/or money damages, attorney's

fees and costs.

 

      14. Executive further agrees that the Company shall be entitled to

preliminary and permanent injunctive relief, without the necessity of proving

actual damages, as well as to an equitable accounting of all earnings, profits

and other benefits arising from any

violations of this Agreement, which rights shall be cumulative and in addition

to any other rights or remedies to which the Company may be entitled.

 

      15. This Agreement and the obligations of the parties hereunder shall be

construed, interpreted and enforced in accordance with the laws of the

Commonwealth of Massachusetts.

 

      16.   Executive certifies and acknowledges as follows:

 

            (a) That Executive has read the terms of this Agreement, and that

Executive understands its terms and effects, including the fact that Executive

has agreed to RELEASE AND FOREVER DISCHARGE the Company and each and everyone of

its affiliated entities from any legal action arising out of Executive's

employment relationship with the Company and the termination of that employment

relationship;

 

            (b) That Executive has signed this Agreement voluntarily and

knowingly in exchange for the consideration described herein, which Executive

acknowledges is adequate and satisfactory to him and which Executive

acknowledges is in addition to any other benefits to which Executive is

otherwise entitled;

 

            (c) That Executive has been and is hereby advised in writing to

consult with an attorney prior to signing this Agreement;

 

            (d) That Executive does not waive rights or claims that may arise

after the date this Agreement is executed;

 

            (e) That the Company has provided him with a period of [TWENTY-ONE

(21)] or [FORTY-FIVE (45)] days within which to consider this Agreement, and

that Executive has signed on the date indicated below after concluding that this

Separation of Employment Agreement and General Release is satisfactory to him;

and

 

            (f) Executive acknowledges that this Agreement may be revoked by him

within seven (7) days after execution, and it shall not become effective until

the expiration of such seven (7) day revocation period. In the event of a timely

revocation by Executive, this Agreement will be deemed null and void and the

Company will have no obligations hereunder.

 

 

      Intending to be legally bound hereby, Executive and the Company executed

the foregoing Separation of Employment Agreement and General Release this ______

day of _______,____.

 

 

_____________________________       Witness:________________________

[EXECUTIVE]

 

 

NOVELL, INC.

 

By:___________________________      Witness:________________________

Name:

Title:

 

 

ARTICLE VI

 

                            Conditions To The Merger

 

   6.1 Conditions to Obligations of Each Party to Effect the Merger. The

respective obligations of each party to this Agreement to effect the Merger

shall be subject to the satisfaction at or prior to the Closing Date of the

following conditions, any of which may be waived if waived in writing by both

Parent and Company:

 

 

     (a) Stockholder Approval. This Agreement shall have been adopted and the

  Merger shall have been duly approved by the requisite vote under applicable

  law by the stockholders of Company.

 

     (b) S-4 Effective; Proxy Statement. The SEC shall have declared the S-4

  effective. No stop order suspending the effectiveness of the S-4 or any

  part thereof shall have been issued and no proceeding for that purpose, and

  no similar proceeding in respect of the Proxy Statement/Prospectus, shall

  have been initiated or threatened in writing by the SEC.

 

     (c) No Order; HSR Act. No Governmental Entity shall have enacted,

  issued, promulgated, enforced or entered any statute, rule, regulation,

  executive order, decree, injunction or other order (whether temporary,

  preliminary or permanent) which is in effect and which has the effect of

  making the Merger illegal or otherwise prohibiting consummation of the

  Merger. All waiting periods, if any, under the HSR Act relating to the

  transactions contemplated hereby will have expired or terminated early and

  all foreign antitrust approvals required to be obtained prior to the Merger

  in connection with the transactions contemplated hereby shall have been

  obtained.

 

     (d) Tax Opinions. Each of Company and Parent shall have received a

  written opinion from its respective tax counsel, in form and substance

  reasonably satisfactory to Company or Parent, as the case may be, to the

  effect that the Merger will constitute a reorganization within the meaning

  of Section 368(a) of the Code and such opinion shall not have been

  withdrawn. The parties to this Agreement agree to make reasonable

  representations as requested by such counsel for the purpose of rendering

  such opinions.

 

   6.2 Additional Conditions to Obligations of Company. The obligation of

Company to effect the Merger shall be subject to the satisfaction at or prior

to the Closing Date of each of the following conditions, any of which may be

waived, in writing, exclusively by Company:

 

     (a) Representations and Warranties. Each representation and warranty of

  Parent and Merger Sub contained in this Agreement (i) shall have been true

  and correct in all material respects as of the date of this Agreement and

  (ii) shall be true and correct in all respects on and as of the Closing

  Date with the same force and effect as if made on the Closing Date except,

  with respect to clause (ii), (A) in each case, or in the aggregate, as does

  not constitute a Material Adverse Effect on Parent and (B) for those

  representations and warranties which address matters only as of a

  particular date (which representations shall have been true and correct

  (subject to the qualification as set forth in the preceding clause (A)) as

  of such particular date) (it being understood that, for purposes of

  determining the accuracy of such representations and warranties, (i) all

  "Material Adverse Effect" qualifications and other qualifications based on

  the word "material" contained in such representations and warranties shall

  be disregarded and (ii) any update of or modification to the Parent

  Schedule made or purported to have been made after the date of this

  Agreement shall be disregarded). Company shall have received a certificate

  with respect to the foregoing signed on behalf of Parent by an authorized

  officer of Parent.

 

     (b) Agreements and Covenants. Parent and Merger Sub shall have performed

  or complied with, in all material respects, all agreements and covenants

  required by this Agreement to be performed or complied with by them on or

  prior to the Closing Date, and Company shall have received a certificate to

  such effect signed on behalf of Parent by an authorized officer of Parent.

 

     (c) Nasdaq Listing. The shares of Parent Common Stock issuable to the

  stockholders of Company as contemplated by Section 1.6 hereof, the Company

  Options and the Earn-Out Agreement shall have been approved for listing on

  the Nasdaq National Market, subject to official notice of issuance.

 

                                      A-33

<PAGE>

 

     (d) Election of Director Nominees. The Board of Directors of Parent

  shall have taken appropriate action to cause the number of directors

  comprising the full Board of Directors of Parent to be increased by two

  persons, from eight to 10, and two members of the Board of Directors of

  Company, designated by Company (the "Company Designees"), shall be

  appointed to fill the newly created vacancies on the Board of Directors of

  Parent, effective upon the Effective Time, and shall serve as directors of

  Parent until their successors, if any, are duly elected and qualified or

  until their earlier death, resignation or removal.

 

     (e) Employment Agreement. Parent shall have offered Jack L. Messman the

  positions of President and Chief Executive Officer of Parent effective on

  the Effective Time on terms substantially similar to those of Mr. Messman's

  current employment agreement with the Company.

 

   6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The

obligations of Parent and Merger Sub to effect the Merger shall be subject to

the satisfaction at or prior to the Closing Date of each of the following

conditions, any of which may be waived, in writing, exclusively by Parent:

 

     (a) Representations and Warranties. Each representation and warranty of

  Company contained in this Agreement (i) shall have been true and correct in

  all material respects as of the date of this Agreement and (ii) shall be

  true and correct in all respects on and as of the Closing Date with the

  same force and effect as if made on and as of the Closing Date except, with

  respect to clause (ii), (A) in each case, or in the aggregate, as does not

  constitute a Material Adverse Effect on Company and (B) for those

  representations and warranties which address matters only as of a

  particular date (which representations shall have been true and correct

  (subject to the qualification as set forth in the preceding clause (A)) as

  of such particular date) (it being understood that, for purposes of

  determining the accuracy of such representations and warranties, (i) all

  "Material Adverse Effect" qualifications and other qualifications based on

  the word "material" contained in such representations and warranties shall

  be disregarded and (ii) any update of or modification to the Company

  Schedule made or purported to have been made after the date of this

  Agreement shall be disregarded). Parent shall have received a certificate

  with respect to the foregoing signed on behalf of Company by an authorized

  officer of Company.

 

     (b) Agreements and Covenants. Company shall have performed or complied

  with, in all material respects, all agreements and covenants required by

  this Agreement to be performed or complied with by it at or prior to the

  Closing Date, and Parent shall have received a certificate to such effect

  signed on behalf of Company by an authorized officer of Company.

 

     (c) Offer of Position of Chief Executive Officer to Jack L.

  Messman. Jack L. Messman shall have accepted and not withdrawn his

  acceptance of the positions of President and Chief Executive Officer of

  Parent to be effective upon the Effective Time.

 

                                  ARTICLE VII

 

                       Termination, Amendment and Waiver

 

   7.1 Termination. This Agreement may be terminated at any time prior to the

Effective Time, whether before or after the requisite approval of the

stockholders of Company and Parent:

 

     (a) by mutual written consent duly authorized by the Boards of Directors

  of Parent and Company;

 

     (b) by either Company or Parent if the Merger shall not have been

  consummated by September 30, 2001 (such date, or such other date that may

  be agreed by mutual written consent, being the "Outside Date") for any

  reason; provided, however, that the right to terminate this Agreement under

  this Section 7.1(b) shall not be available to any party whose action or

  failure to act has been a principal cause of or resulted in the failure of

  the Merger to occur on or before such date if such action or failure to act

  constitutes a breach of this Agreement;

 

     (c) by either Company or Parent if a Governmental Entity shall have

  issued an order, decree or ruling or taken any other action, in any case

  having the effect of permanently restraining, enjoining or otherwise

 

                                     A-34

<PAGE>

 

  prohibiting the Merger, which order, decree, ruling or other action shall

  have become final and nonappealable;

 

     (d) by either Company or Parent if either: (i) the Company Stockholders'

  Meeting (including any adjournments thereof) shall have been held and

  completed and the stockholders of Company shall have taken a final vote on

  a proposal to adopt this Agreement and (ii) the required approval of the

  stockholders of Company contemplated by this Agreement shall not have been

  obtained; provided, however, that the right to terminate this Agreement

  under this Section 7.1(d) shall not be available to Company or Parent where

  the failure to obtain Company stockholder approval shall have been caused

  by the action or failure to act of Company or Parent, respectively, and

  such action or failure to act constitutes a breach by Company or Parent,

  respectively, of this Agreement;

 

     (e) by Company, upon a breach of any covenant or agreement on the part

  of Parent set forth in this Agreement, or if any representation or warranty

  of Parent shall have been untrue when made or shall have become untrue, in

  either case such that the conditions set forth in Section 6.2(a) or Section

  6.2(b) would not be satisfied as of the time of such breach or as of the

  time such representation or warranty shall have become untrue, provided,

  that if such inaccuracy in Parent's representations and warranties or

  breach by Parent is curable by Parent through exercise of its commercially

  reasonable efforts, then Company may not terminate this Agreement pursuant

  to this Section 7.1(e) for thirty (30) days after delivery of written

  notice from Company to Parent of such breach, provided that Parent

  continues to exercise commercially reasonable efforts to cure such breach

  (it being understood that Company may not terminate this Agreement pursuant

  to this Section 7.1(e) if such breach by Parent is cured during such

  thirty-day period);

 

     (f) by Parent, upon a breach of any covenant or agreement on the part of

  Company set forth in this Agreement, or if any representation or warranty

  of Company shall have been untrue when made or shall have become untrue, in

  either case such that the conditions set forth in Section 6.3(a) or Section

  6.3(b) would not be satisfied as of the time of such breach or as of the

  time such representation or warranty shall have become untrue, provided,

  that if such inaccuracy in Company's representations and warranties or

  breach by Company is curable by Company through exercise of its

  commercially reasonable efforts, then Parent may not terminate this

  Agreement pursuant to this Section 7.1(f) for thirty (30) days after

  delivery of written notice from Parent to Company of such breach, provided

  that Company continues to exercise commercially reasonable efforts to cure

  such breach (it being understood that Parent may not terminate this

  Agreement pursuant to this Section 7.1(f) if such breach by Company is

  cured during such thirty-day period);

 

     (g) by Parent if a Triggering Event (as defined below) shall have

  occurred.

 

   For the purposes of this Agreement, a "Triggering Event" shall be deemed to

have occurred if: (i) the Board of Directors of Company or any committee

thereof shall for any reason have withheld, withdrawn or refrained from making

or shall have modified, amended or changed in a manner adverse to Parent its

recommendation in favor of the adoption of this Agreement or the approval of

the Merger; (ii) Company shall have failed to include in the Proxy

Statement/Prospectus the recommendation of the Board of Directors of Company in

favor of the adoption of this Agreement and the approval of the Merger; (iii)

the Board of Directors of Company fails to reaffirm its recommendation in favor

of the adoption of this Agreement within ten (10) business days after Parent

requests in writing that such recommendation be reaffirmed at any time

following the public announcement and during the pendency of an Acquisition

Proposal; (iv) the Board of Directors of Company or any committee thereof shall

have approved or recommended any Acquisition Proposal; (v) Company shall have

entered into any letter of intent or similar document or any agreement,

contract or commitment accepting any Acquisition Proposal; (vi) Company shall

have breached any of the provisions of Section 5.4 of this Agreement or (vii) a

tender or exchange offer relating to not less than 15% of the then outstanding

shares of capital stock of Company shall have been commenced by a person

unaffiliated with Parent and Company shall not have sent to its securityholders

pursuant to Rule 14e-2 promulgated under the Securities Act, within ten (10)

business days after such tender or exchange offer is first published sent or

given, a statement disclosing that Company recommends rejection of such tender

or exchange offer.

 

                                      A-35

<PAGE>

 

   7.2 Notice of Termination; Effect of Termination. Any termination of this

Agreement under Section 7.1 will be effective immediately upon (or if the

termination is pursuant to Section 7.1(e) or 7.1(f) and the proviso therein is

applicable, thirty (30) days after) the delivery of written notice thereof by

the terminating party to the other parties hereto. In the event of the

termination of this Agreement as provided in Section 7.1, this Agreement shall

be of no further force or effect, except (i) as set forth in this Section 7.2,

Section 7.3 and Article 8 (General Provisions), each of which shall survive the

termination of this Agreement, and (ii) nothing herein shall relieve any party

from liability for any intentional or willful breach of this Agreement. No

termination of this Agreement shall affect the obligations of the parties

contained in the Confidentiality Agreements, all of which obligations shall

survive termination of this Agreement in accordance with their terms.

 

   7.3 Fees and Expenses.

 

     (a) General. Except as set forth in this Section 7.3, all fees and

  expenses incurred in connection with this Agreement and the transactions

  contemplated hereby shall be paid by the party incurring such fees and

  expenses whether or not the Merger is consummated; provided, however, that

  Parent and Company shall share equally all fees and expenses, other than

  attorneys' and accountants fees and expenses, incurred in connection with

  the printing and filing (with the SEC) of the Proxy Statement/Prospectus

  (including any preliminary materials related thereto) and the S-4

  (including financial statements and exhibits) and any amendments or

  supplements thereto and any fees required to be paid under the HSR Act.

 

     (b) Company Payments.

 

       (i) Company shall pay to Parent in immediately available funds,

    within two (2) business days after demand by Parent, an amount equal to

    seven million three hundred thousand dollars ($7,300,000) (the

    "Termination Fee") if this Agreement is terminated by Parent pursuant

    to Section 7.1(g).

 

       (ii) If (A) this Agreement is terminated by Parent or Company, as

    applicable, pursuant to Sections 7.1(b) or (d)(i), (B) prior to such

    termination a third party shall have delivered an Acquisition Proposal

    and (C) within twelve (12) months following the termination of this

    Agreement a Company Acquisition (as defined below) is consummated or

    Company enters into an agreement or letter of intent providing for a

    Company Acquisition, then Company shall pay Parent in immediately

    available funds at or prior to consummating such Company Acquisition an

    amount equal to the Termination Fee.

 

       (iii) Company acknowledges that the agreements contained in this

    Section 7.3(b) are an integral part of the transactions contemplated by

    this Agreement, and that, without these agreements, Parent would not

    enter into this Agreement; accordingly, if Company fails to pay in a

    timely manner the amounts due pursuant to this Section 7.3(b) and, in

    order to obtain such payment, Parent makes a claim that results in a

    judgment against Company for the amounts set forth in this Section

    7.3(b), Company shall pay to Parent its reasonable costs and expenses

    (including reasonable attorneys' fees and expenses) in connection with

    such suit, together with interest on the amounts set forth in this

    Section 7.3(b) at the prime rate of The Chase Manhattan Bank (or any

    successor thereto) in effect on the date such payment was required to

    be made. Payment of the fees described in this Section 7.3(b) shall not

    be in lieu of damages incurred in the event of breach of this

    Agreement. For the purposes of this Agreement, "Company Acquisition"

    shall mean any of the following transactions (other than the

    transactions contemplated by this Agreement): (i) a merger,

    consolidation, business combination, recapitalization, liquidation,

    dissolution or similar transaction involving Company pursuant to which

    the stockholders of Company immediately preceding such transaction hold

    less than 60% of the aggregate equity interests in the surviving or

    resulting entity of such transaction, (ii) a sale or other disposition

    by Company of assets representing in excess of 60% of the aggregate

    fair market value of Company's business immediately prior to such sale

    or (iii) the acquisition by any person or group (including by way of a

    tender offer or an exchange offer or issuance by Company), directly or

 

                                      A-36

<PAGE>

 

    indirectly, of beneficial ownership or a right to acquire beneficial

    ownership of shares representing in excess of 40% of the voting power

    of the then outstanding shares of capital stock of Company.

 

   7.4 Amendment. Subject to applicable law, this Agreement may be amended by

the parties hereto at any time by execution of an instrument in writing signed

on behalf of each of Parent and Company.

 

   7.5 Extension; Waiver. At any time prior to the Effective Time, any party

hereto may, to the extent legally allowed, (i) extend the time for the

performance of any of the obligations or other acts of the other parties

hereto, (ii) waive any inaccuracies in the representations and warranties made

to such party contained herein or in any document delivered pursuant hereto and

(iii) waive compliance with any of the agreements or conditions for the benefit

of such party contained herein. Any agreement on the part of a party hereto to

any such extension or waiver shall be valid only if set forth in an instrument

in writing signed on behalf of such party. Delay in exercising any right under

this Agreement shall not constitute a waiver of such right.

 

                                  ARTICLE VIII

 

                               General Provisions

 

   8.1 Non-Survival of Representations and Warranties. The representations and

warranties of Company, Parent and Merger Sub contained in this Agreement or in

any certificate or instrument delivered pursuant to Article VI shall terminate

at the Effective Time, and only the covenants that by their terms survive the

Effective Time shall survive the Effective Time.

 

   8.2 Notices. All notices and other communications hereunder shall be in

writing and shall be deemed given on the day of delivery if delivered

personally or sent via telecopy (receipt confirmed) or overnight courier

(delivery confirmed), to the parties at the following addresses or telecopy

numbers (or at such other address or telecopy numbers for a party as shall be

specified by like notice):

 

      (a) if to Parent or Merger Sub, to:

 

       Novell, Inc.

       1800 Novell Place

       ORM-M-301

       Provo, UT 84606

       Attention: Josephine T. Parry, General Counsel

       Telecopy No.: (801)222-5677

 

       with a copy to:

 

       Wilson Sonsini Goodrich & Rosati

       Professional Corporation

       650 Page Mill Road

       Palo Alto, CA 94304

       Attention: John L. Donahue, Esq.

                  Steve L. Camahort, Esq.

       Telecopy No.: (650) 493-9300

 

      (b) if to Company, to:

 

       Cambridge Technology Partners (Massachusetts), Inc.

       Eight Cambridge Center

       Cambridge, Massachusetts 02142

       Attention: Joseph LaSala, Esq., General Counsel

       Telecopy No.: (617)551-5101

 

                                      A-37

<PAGE>

 

       with a copy to:

 

       Morgan Lewis & Bockius LLP

       101 Park Avenue

       New York, NY 10178

       Attention: Howard L. Shecter, Esq.

       Telecopy No.: (212) 309-7044

 

   8.3 Interpretation.

 

     (a) When a reference is made in this Agreement to Exhibits, such

  reference shall be to an Exhibit to this Agreement unless otherwise

  indicated. When a reference is made in this Agreement to a Section, such

  reference shall be to a Section of this Agreement. Unless otherwise

  indicated the words "include," "includes" and "including" when used herein

  shall be deemed in each case to be followed by the words "without

  limitation." The table of contents and headings contained in this Agreement

  are for reference purposes only and shall not affect in any way the meaning

  or interpretation of this Agreement. Reference to the subsidiaries of an

  entity shall be deemed to include all direct and indirect subsidiaries of

  such entity.

 

     (b) For purposes of this Agreement, the term "person" shall mean any

  individual, corporation (including any non-profit corporation), general

  partnership, limited partnership, limited liability partnership, joint

  venture, estate, trust, company (including any limited liability company or

  joint stock company), firm or other enterprise, association, organization,

  entity or Governmental Entity.

 

     (c) For purposes of this Agreement, the term "Material Adverse Effect"

  when used in connection with an entity means any change, event,

  circumstance or effect, individually or when aggregated with other changes,

  events, circumstances or effects, that is materially adverse to the

  business, financial condition or results of operations of such entity and

  its subsidiaries taken as a whole; provided, however that (i) no change,

  event, circumstance or effect directly attributable to (A) changes in

  general economic conditions or changes affecting the information technology

  industry generally or (B) the loss of current or prospective customers or

  other adverse event that such entity successfully bears the burden of

  proving arose from such entity entering into this Agreement shall

  constitute a Material Adverse Effect and (ii) in no event shall a decrease

  in the trading price of such entity's common stock in and of itself

  constitute a Material Adverse Effect.

 

     (d) For purposes of this Agreement, an "agreement," "arrangement,"

  "contract," "commitment" or "plan" shall mean a legally binding, written

  agreement, arrangement, contract, commitment or plan, as the case may be.

 

     (e) For purposes of this Agreement, the term "knowledge of the Company"

  shall mean the knowledge of the Company's officers, directors and key

  employees, assuming that such persons have made due and diligent inquiry of

  the matters represented.

 

     (f) For purposes of this Agreement, a "subsidiary" of any person means

  another person 50% or more of the total combined voting power of all

  classes of capital stock or other voting interests of which, or 50% or more

  of the equity securities of which, is owned directly or indirectly by such

  first person.

 

     (g) For purposes of this Agreement, a "business day" means any day on

  which banks are not required or authorized to close in the City of New

  York.

 

   8.4 Counterparts. This Agreement may be executed in one or more

counterparts, all of which shall be considered one and the same agreement and

shall become effective when one or more counterparts have been signed by each

of the parties and delivered to the other party, it being understood that all

parties need not sign the same counterpart.

 

   8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the

documents and instruments and other agreements among the parties hereto as

contemplated by or referred to herein, including the Company Schedule and the

Parent Schedule (a) constitute the entire agreement among the parties with

respect to the

 

                                      A-38

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subject matter hereof and supersede all prior agreements and understandings,

both written and oral, among the parties with respect to the subject matter

hereof, it being understood, however, that the Confidentiality Agreement shall

continue in full force and effect until the Closing and shall survive any

termination of this Agreement; and (b) except with respect to the Indemnified

Parties under Section 5.10, are not intended to confer upon any other person

any rights or remedies hereunder.

 

   8.6 Severability. In the event that any provision of this Agreement, or the

application thereof, becomes or is declared by a court of competent

jurisdiction to be illegal, void or unenforceable, the remainder of this

Agreement will continue in full force and effect and the application of such

provision to other persons or circumstances will be interpreted so as

reasonably to effect the intent of the parties hereto. The parties further

agree to replace such void or unenforceable provision of this Agreement with a

valid and enforceable provision that will achieve, to the extent possible, the

economic, business and other purposes of such void or unenforceable provision.

 

   8.7 Other Remedies; Specific Performance. Except as otherwise provided

herein, any and all remedies herein expressly conferred upon a party will be

deemed cumulative with and not exclusive of any other remedy conferred hereby,

or by law or equity upon such party, and the exercise by a party of any one

remedy will not preclude the exercise of any other remedy. The parties hereto

agree that irreparable damage would occur in the event that any of the

provisions of this Agreement were not performed in accordance with their

specific terms or were otherwise breached. It is accordingly agreed that the

parties shall be entitled to seek an injunction or injunctions to prevent

breaches of this Agreement and to enforce specifically the terms and provisions

hereof in any court of the United States or any state having jurisdiction, this

being in addition to any other remedy to which they are entitled at law or in

equity. In any action at law or suit in equity to enforce this Agreement or the

rights of any of the parties hereunder, the prevailing party in such action or

suit shall be entitled to receive a reasonable sum for its attorneys' fees and

all other reasonable costs and expenses incurred in such action or suit.

 

   8.8 Governing Law. This Agreement shall be governed by and construed in

accordance with the laws of the State of Delaware, regardless of the laws that

might otherwise govern under applicable principles of conflicts of law thereof.

 

   8.9 Rules of Construction. The parties hereto agree that they have been

represented by counsel during the negotiation and execution of this Agreement

and, therefore, waive the application of any law, regulation, holding or rule

of construction providing that ambiguities in an agreement or other document

will be construed against the party drafting such agreement or document.

 

   8.10 Assignment. No party may assign either this Agreement or any of its

rights, interests, or obligations hereunder without the prior written approval

of the other parties. Subject to the preceding sentence, this Agreement shall

be binding upon and shall inure to the benefit of the parties hereto and their

respective successors and permitted assigns.

 

   8.11 Waiver of Jury Trial. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY

IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR

COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR

RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN

THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

 

                                      A-39

<PAGE>

 

   IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed by their duly authorized respective officers as of the date first

written above.

 

                                          Novell, Inc.

 

                                                     /s/ Eric Schmidt

                                          By: _________________________________

 

                                                       Eric Schmidt

                                          Name: _______________________________

 

                                                  Chief Executive Officer

                                          Title: ______________________________

 

                                          Ceres Neptune Acquisition Corp.

 

                                                     /s/ Eric Schmidt

                                          By: _________________________________

 

                                                       Eric Schmidt

                                          Name: _______________________________

 

                                                  Chief Executive Officer

                                          Title: ______________________________

 

                                          Cambridge Technology Partners

                                          (Massachusetts), Inc.

 

                                                    /s/ Jack L. Messman

                                          By: _________________________________

 

                                                      Jack L. Messman

                                          Name: _______________________________

 

                                               President and Chief Executive

                                                          Officer

                                          Title: ______________________________

 

                       **** REORGANIZATION AGREEMENT ****