Exhibit 10.5

GROUP I

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (this “Agreement”), dated as of February 8, 2007 is
made and entered by and between Novell, Inc., a Delaware corporation (the
“Company”), and John Dragoon (the “Executive”).

WITNESSETH:

WHEREAS, the Executive is a senior executive of the Company and is expected to
make major contributions to the short- and long-term profitability, growth and
financial strength of the Company:

WHEREAS, the Board (as defined below) has determined that appropriate
arrangements should be taken to encourage the continued attention and dedication
of the Executive to his assigned duties without distraction; and

WHEREAS, in consideration of the Executive’s employment with the Company, the
Company desires to provide the Executive with certain compensation and benefits
set forth in this Agreement in order to ameliorate the financial and career
impact on the 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.

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:

“Base Pay” means the greater of(i) the Executive’s annual base salary rate,
exclusive of bonuses, commissions and other Incentive Pay, as in effect
immediately preceding the Executive’s Termination Date, or (ii) the 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 the Executive’s Termination Date.

“Board” means the Board of Directors of the Company.

“Cause”:

For purposes of Involuntary Termination Prior to a Change in Control. means a
determination by the Company’s Chief Executive Officer or Senior Vice
President-People, in either case with legal advice and consultation of the
Company’s Senior Vice President – General

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Counsel. acting in his authority as the Company’s general counsel, that the
Executive has committed any of the following acts:

ued violations of the Executive’s obligations which are demonstrably willful or
deliberate on the

tive’s part after there has been delivered to the Executive a written demand for
performance from the

any which describes the basis for the Company’s belief that the Executive has
willfully or deliberately

ed his obligations to the Company;

ng in willful misconduct which is injurious to the Company or any Subsidiary;

itting a felony, an act of fraud against or the misappropriation of property
belonging to the Company or

ibsidiary:

ing, in any material respect, terms of any confidentiality or proprietary
information agreement between

ecutive and the Company; or

itting a material violation of the Company’s Code of Business Ethics or Employee
Conduct and Standards

, as either or both are in effect from time to time by the Company.

For purposes of Involuntary Termination Associated With a Change in Control,
means a determination by the Board that the Executive has committed any of the
following acts:

ecutive has been convicted of a criminal violation involving fraud, embezzlement
or theft in connection

is duties or in the course of his employment with the Company or any Subsidiary;
or

ecutive has committed intentional wrongful disclosure of secret processes or
confidential information of

mpany or any Subsidiary; and any such act has been demonstrably and materially
harmful to the

my. For purposes of this subparagraph (B), no act on the part of the Executive
will be deemed

tional” if it was due primarily to an error in judgment or negligence, but will
be deemed “intentional” if

y the Executive not in good faith and without reasonable belief that the
Executive’s action was in the best

t of the Company.

thstanding the foregoing, the Executive will not be deemed to have been
terminated for “Cause” under

iuse (ii) unless and until there has been delivered to the Executive a copy of a
resolution duly adopted by

 

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irmative vote of not less than three-quarters of the members of the Board then
in office at a meeting of the

finding that, in the good faith opinion of the Board, the Executive has
committed an act constituting

,” as herein defined, and specifying the particulars thereof in detail. Prior to
any such determination, the

tive shall be provided with reasonable notice of such pending determination and
the Executive, together

is counsel (if the Executive chooses to have counsel present at such meeting),
shall be provided with the

unity to be heard before the Board makes any such determination. Nothing herein
will limit the right of

ecutive or his beneficiaries to contest the validity or propriety of any such
determination.

“Change in Control” means the occurrence of any of the following events:

the acquisition by any individual, entity or group (within the meaning of
section 1 3(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 l(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 l(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 l(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 l(d)(i) or an acquisition of Voting Stock
described in clause (B) of this Section l(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 l(d)(i);

individuals who, as of the date hereof constitute the Board (the “Incumbent
Board,” as modified by this Section l(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

 

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whose initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule l4a-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;

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 l(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 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).

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986. as
amended.

“Code” means the Internal Revenue Code of 1986, as amended.

“Constructive Termination Associated With a Change in Control” means the
termination of the Executive’s employment with the Company by the Executive as a
result of the occurrence of one of the following events, without the Executive’s
express written consent, as a result of a Change in Control:

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 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;

 

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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,
Incentive Pay, and Equity Compensation, or (C) the termination or denial of the
Executive’s rights to Employee Benefits or a reduction in the scope or value
thereof;

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;

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);

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; pr

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 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 the 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.

 

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“Constructive Termination Prior to a Change in Control” means the termination of
the Executive’s employment with the Company by the Executive as a result of the
occurrence of one of the following events, without the Executive’s express
written consent:

a comprehensive and substantial reduction in all or most of the Executive’s
primary duties, authority and responsibilities compared to the Executive’s
duties, authority and responsibilities immediately prior to such reduction;

a significant reduction in the Executive’s Base Pay compared to the Executive’s
Base Pay in effect immediately prior to such reduction; provided, however, that
a reduction in the Executive’s Base Pay of less than twenty percent (20%) or a
reduction in the Executive’s Base Pay that is part of an overall reduction in
compensation also applied to other senior executives of the Company as a result
of decreased business performance by the Company or one of its business units,
shall not constitute a Constructive Termination Prior to a Change in Control; or

the failure of the Company to obtain the assumption of this Agreement by any
successors.

In no event shall the termination of the 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.

“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.

“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.

“Equity Compensation” means any stock option, stock appreciation, stock
purchase, restricted stock, restricted stock unit, long term incentive cash
bonus award or any other kind of equity-based plan, program, arrangement or
grant regardless of whether the form of distribution is in stock or cash.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Incentive Pay” means the greater of: (i) the Executive’s maximum Target Bonus
for which the Executive was eligible during the period that includes the
Termination Date, or (ii) the highest aggregate bonus or incentive payment paid
to the 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 the Executive was eligible to receive, but did not receive prior to his
Termination Date, in regard to services rendered in the year covered by the
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 Equity Compensation, one time bonus or
payment (including, but not limited to, any sign-on bonus), any amounts
contributed by the Company for the benefit of the 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.

“Involuntary Termination Associated With a Change in Control” means the
termination of the 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.

“Involuntary Termination Prior to a Change in Control” means the termination of
the 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.

“Restricted Business” means,

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 he
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
c-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.

 

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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.

“Restricted Territory” means the counties, towns, cities or states of any
country in which the Company operates or does business.

“Severance Period” means the twelve (12) month period after the Executive’s
Termination Date.

“Subsidiary” means any Company controlled affiliate.

“Termination Date” means the last day of the Executive’s employment with the
Company.

“Termination of Employment” means, except as provided in the following sentence,
the termination of the 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 the 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.

“Voting Stock” means securities entitled to vote generally in the election of
directors.

2. Termination Prior to a Change in Control.

Involuntary Termination Prior to a Change in Control. In the event the
Executive’s employment is terminated on account of an Involuntary Termination
Prior to a Change in Control, the Executive shall be entitled to the benefits
provided in subsection (b) of this Section 2.

Compensation and Benefits Upon Involuntary Termination Prior to a Change in
Control. Subject to the provisions of Section 5 hereof, 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:

150% of his Base Pay. Unless a different payment stream is made pursuant to
Section 13(b) of this Agreement, such Base Pay shall be paid to the Executive in
equal installments over the Severance Period, consistent with the Company’s
normal payroll practices, commencing with the first administratively practicable
payroll period that occurs after the period during which the Executive’s right
to revoke his acceptance to the terms of the Release has expired.

 

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The 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 the Executive’s
Termination Date occurs, multiplied by a fraction, the numerator of which is the
number of days during which the Executive was employed by the Company in the
year of his termination and the denominator of which is 365. Unless a different
payment stream is made pursuant to Section 13(b) of this Agreement, such pro
rated Incentive Pay shall be paid to the Executive in equal installments over
the Severance Period, consistent with the Company’s normal payroll practices,
commencing with the first administratively practicable payroll period that
occurs after the period during which the Executive’s right to revoke his
acceptance to the terms of the Release has expired.

Commencing on the month immediately following the month in which his Termination
Date occurs, the Executive shall continue to receive for a twelve (12) month
period the medical and dental coverage in effect on his Termination Date (or
generally comparable coverage) for himself and, where applicable, his spouse and
dependents, at the same premium rates as may be charged from time to time for
employees of the Company generally, as if the Executive had continued in
employment with the Company during such period; provided, however, that in the
event that such continuation coverage violates applicable law or results in a
material adverse tax effect to the Company or the Executive, the Company shall
pay the Executive cash in lieu of such coverage in an amount equal to the
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 period, with such continuation coverage continuing until the earlier
of (A) the end of the applicable COBRA health care continuation coverage period
or (B) the date on which the Executive is covered by the medical and dental
coverage of his successor employer, if any.

With respect to any Company stock options held by the Executive as of his
Termination Date, 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, shall 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
(collectively, the “Pre-Change in Control Option Expiration Date”); provided,
however, that in no event will the option be exercisable beyond its original
term or, if not addressed in the grant agreement, then not later than the latest
date that will avoid adverse tax consequences to the Executive (if such date is
earlier than the Pre-Change in Control Option Expiration Date).

With respect to any shares of Company common stock held by the Executive as of
his Termination Date that are subject to the Company’s repurchase right upon
termination of the

 

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Executive’s employment (“Restricted Stock”), the Company shall waive such
repurchase rights 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.

To cover the cost of outplacement assistance services for the Executive that are
actually provided by an outplacement agency selected by the 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.

The Executive shall receive any amounts earned, accrued or owing but not yet
paid to the 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.

Involuntary Termination Associated With a Change in Control. In the event the
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 (2) year period after the Change in Control, or
(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, the Executive shall be entitled
to the benefits provided in subsection (b) of this Section 3. If the Executive
is entitled to benefits described in this Section 3 by reason of clause (a)(ii)
above, the 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 the 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 the 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.

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:

Lump sum cash payment equal to (A) two (2) times Base Pay, plus (B) two
(2) times Incentive Pay. Unless the payment is delayed pursuant to Section 13(b)
of this Agreement,

 

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this lump sum cash payment shall he paid to the Executive within thirty
(30) days after the Executive’s Termination Date (or the end of the revocation
period for the Release, if later).

Lump sum cash payment equal to Executive’s 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 the Executive’s
Termination Date occurs, multiplied by a fraction, the numerator of which is the
number of days during which the Executive was employed by the Company in the
year of his termination and the denominator of which is 365. Unless the payment
is delayed pursuant to Section 13(h) of this Agreement, this lump sum payment
shall be paid to the Executive within thirty (30) days after the Executive’s
Termination Date (or the end of the revocation period fir the Release, if
later).

Commencing with the month immediately following the month in which his
Termination Date occurs, the Executive shall continue to receive for a
twenty-four (24) month period the medical and dental coverage in effect on his
Termination Date (or generally comparable coverage) for himself and, where
applicable, his spouse and dependents, at the same premium rates as may be
charged from time to time for employees generally, as if the Executive had
continued in employment during such period; provided. however, that in the event
that such continuation coverage violates applicable law or results in a material
adverse tax effect to the Company or the Executive, the Company shall pay the
Executive cash in lieu of such coverage in an amount equal to the 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 twenty-four (24) month period,
with such continuation coverage continuing until the earlier of(A) the end of
the applicable COBRA health care continuation coverage period or (B) the date on
which the Executive is covered by the medical and dental coverage of his
successor employer, if any.

Lump sum cash payment equal to the total amount that the Executive would have
received under the Company’s 40 1(k) plan as a Company match if the Executive
was eligible to participate in the Company’s 401(k) plan for the twenty-four
(24) month period after his Termination Date and he contributed the maximum
amount to the plan for the match. Unless the payment is delayed pursuant to
Section 13(b) of this Agreement, this lump sum payment shall be paid to the
Executive within thirty (30) days after the Executive’s Termination Date (or the
end of the revocation period for the Release, if later).

Lump sum cash payment equal to the total premiums that the Company would have
paid under the Executive’s split-dollar life insurance policy, if any, that is
in effect immediately prior to his Termination Date, if the Executive was
employed by the Company for the twenty-four (24) month period following the
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 twenty-four (24) month period, the
Executive shall only receive a lump sum cash payment equal to the remaining

 

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Company premiums for the term of the arrangement. Unless payment is delayed
pursuant to Section 13(b) of this Agreement, this lump sum payment shall be paid
to the Executive within thirty (30) days after the 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 the Executive pursuant to this clause
(v) if on the Executive’s Termination Date, either the Executive does not have a
split-dollar life insurance policy with the Company or the Company has no
obligations to make premium contributions to the Executive’s split-dollar life
insurance policy.

Lump sum cash payment equal to twenty percent (20%) of the Executive’s Base Pay
in order to cover the cost of outplacement assistance services for the
Executive. Unless payment is delayed pursuant to Section 13(b) of this
Agreement, this lump sum payment shall be paid to the Executive within thirty
(30) days after the Executive’s Termination Date (or the end of the revocation
period for the Release, if later).

The Executive shall receive any amounts earned, accrued or owing but not yet
paid to the 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.

Equity Compensation. Notwithstanding any provision to the contrary in any
applicable plan, program or agreement, or any contrary provision in this
Agreement in the event that either or both of the following occur:

a Change in Control in which the Executive’s employment is terminated on account
of an Involuntary Termination Associated with a Change in Control; or

a Change in Control occurs, but the acquirer or successor fails to provide the
Executive with equity compensation rights substantially comparable in value to
the Executive’s unvested equity compensation rights immediately prior to the
Change in Control;

then 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, as of
the date of the Executive’s Termination Date in the case of clause (i) or as of
the date of the Change in Control in the case of clause (ii), 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
twenty-four (24) months after the Executive’s Termination Date, or (ii) the
period set forth in the award agreement covering the option (collectively, the
“Change in Control Option Expiration Date”); provided, however, that in no event
will the option be exercisable beyond its original term or, if not addressed in
the grant agreement, then not later than the latest date that will avoid adverse
tax consequences to the Executive (if such date is earlier than the Change in
Control Option Expiration Date).

For purposes of clause (ii) above, equity compensation provided by the acquiror
or successor shall be deemed substantially comparable to the Executive’s
unvested equity compensation rights immediately prior to the Change in Control
only if (A) such unvested equity compensation rights are assumed by the acquiror
or successor on the same basis (including the

 

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same exchange ratio) as is provided to non-employee holders of such equity or,
if none, on a basis substantially identical to such basis or (B) such unvested
equity compensation rights are replaced by equity compensation rights granted by
the acquiror or successor which rights are materially identical in value to
(employing the same equity valuation methodology as the Company employed for
financial accounting purposes immediately prior to the Change in Control) and
are subject to the same vesting schedule as was applicable to the unvested
equity compensation rights held by the Executive immediately prior to the Change
in Control.

4. Termination of Employment on Account of Disability, Cause or Death.
Notwithstanding anything in this Agreement to the contrary, if the Executive’s
employment terminates on account of Disability, the Executive shall be entitled
to receive disability benefits under any disability program maintained by the
Company that covers the Executive. and the 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 the Executive’s employment terminates on
account of Cause or because of his death, the 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 such payments shall be made or
benefits provided unless the 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 the 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 the
Executive participated and under which the 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.

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, benefit provided or distribution by the
Company to or for the benefit of the 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 the Executive an
additional amount (the “Gross-Up Payment”) such that the net amount retained by
the 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

 

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the Payment. The right to each payment of such amount shall vest as of the day
on which the payment determination is made, and each such payment shall be made
on the thirtieth (30th) day following the vesting date.

Notwithstanding subsection (a), and notwithstanding any other provisions of this
Agreement to the contrary, if the net after-tax benefit to the 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 the
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 the
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 he paid under section 280G of the Code without
imposition of an excise tax under section 4999 of the Code.

The provisions of this subsection (c) shall apply only if the Company is not
required to pay the Executive a Gross-Up Payment as a result of subsection
(h) above. If the Company is not required to pay the 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 clause (i) below (a
“Parachute Cap”) if the application of the Parachute Cap is beneficial to the
Executive, according to the following provisions:

If clause (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.

It is the intention of the parties that the Parachute Cap apply only if
application of the Parachute Cap is beneficial to the Executive. Therefore, if
the net amount that would be retained by the 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 the Executive with
the Parachute Cap, then the Company shall not apply the Parachute Cap to the
Executive’s payments. In that event, neither the Parachute Cap nor the Gross-Up
Payment will apply to the Executive.

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 the Executive within ten days of the 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 the Executive.

 

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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 he 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
he 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 on the thirtieth day following its receipt of adequate substantiation to
support payment of the expense amount.

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

 

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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 the Executive’s
Termination of Employment, the Company’s obligations to provide severance pay as
provided in Sections 2 and 3 shall he 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 the Executive pursuant to
Sections 2 and 3 shall cease, without prejudice to any other remedies that may
be available to the Company.

Covenant Not to Compete.

If the Executive is receiving compensation and benefits under Section 2(b)
above, then for a period of nine (9) months following the 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.

If the 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 one
(1) year following the 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.

Covenant Not to Solicit. The Executive shall not, for a period of two (2) years
after the Executive’s Termination Date for any reason: (i) solicit, encourage or
take any other action which is intended to induce any other employee of the
Company to terminate his employment

 

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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 the
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.

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 he 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.

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. Certain Tax Matters.

Withholding. 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.

Effect of Section 409A of the Code. The parties intend that the provisions of
this Agreement will operate in a manner that will avoid adverse federal income
tax consequences under section 409A of the Code. If a payment under this
Agreement to the Executive is subject to the requirements of section 409A of the
Code, the Executive hereby acknowledges and agrees that the Company may take any
actions deemed necessary in its sole discretion to avoid adverse federal income
tax consequences under section 409A of the Code and that such action may be
taken without the consent of the Executive, including, but not limited to,
delaying the commencement of any payment under this Agreement for six (6) months
from the Executive’s Termination Date if it is determined that as of such
Termination Date, the Executive is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and corresponding regulations, and such
amounts are deemed as deferred compensation subject to the requirements of
section 409A of the Code.

Time of Payment. If a payment is not made by the designated payment date under
this Agreement, the payment will be made in any event by the later of (i) the
end of the calendar year

 

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in which the designated payment date occurs or (ii) the 15th day of the third
calendar month following the designated payment date, or such other date as may
be permitted by section 409A of the Code and the regulations thereunder.

14. Term of Agreement. This Agreement shall continue in full force and effect
for the duration of the Executive’s employment with the Company; provided,
however, that after the termination of the 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.

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.

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.

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

 

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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.

Except as provided in subparagraph (h) below or pursuant to Section 13(b), 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 vi11 he 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.

Notwithstanding any contrary provision of this Agreement, the Company may modify
benefits otherwise payable or to be provided under this Agreement without
obtaining the Executive’s consent to such modification to the extent that the
Company determines in its sole discretion that such modification is necessary or
appropriate in order to effect compliance with applicable law or regulatory
requirements.

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]

 

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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/ Ronald W. Hovsepian     2/8/07 Name:   Ronald W.
Hovsepian       Title:   President and Chief Executive Officer      

 

EXECUTIVE     /s/ John Dragoon       John Dragoon      

 

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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.

 

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(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.]

[Note: Paragraph 2 only applies if Executive is receiving severance benefits on
account of an Involuntary Termination Associated With a Change in Control.]

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:

 

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[Note: The following severance benefits would apply if the Executive has an
Involuntary Termination Prior to a Change in Control.]

(i) [to pay Executive 150% of Executive’s Base Pay (as defined in the Severance
Agreement) [for the Severance Period (as defined in the Severance Agreement),
payable in equal installments, consistent with the Company’s past payroll
practices, commencing with the first payroll period that occurs after the period
during which Executive’s right to revoke Executive’s acceptance to the terms of
this Agreement have expired.] or [, payable in a lump sum, within thirty
(30) days after 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 [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 the period during which Executive’s right to revoke Executive’s acceptance
to the terms of the Release has expired.] or [paid in a lump sum, within thirty
(30) days after Executive’s Date of Resignation (or the end of the revocation
period set forth in this Agreement, if later).]

(iii) [for a period of twelve (12) 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 twelve (12) 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 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 Executive’s
successor employer, if any.]

(iv) with respect to any Company stock options held by the Executive as of
Executive’s Date of Resignation, the portion of Executive’s stock options, if
any, which would have vested and become exercisable within the one (1) year
period after the Executive’s Date of Resignation shall become vested and
exercisable as of Executive’s Date of Resignation, 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 Date of Resignation, or (B) the period set
forth in the award agreement covering the option, subject in either case only to
the original term of the option.

 

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Any stock options held by Executive that are not exercisable as of the
Executive’s Date of Resignation shall terminate as of the Executive’s Date of
Resignation.

(v) with respect to any shares of Company common stock that are held by the
Executive that are, at the time of Executive’s Date of Resignation, subject to
the Company’s repurchase right upon termination of the Executive’s employment
(“Restricted Stock”), to waive such repurchase right as to the number of shares
of Restricted Stock that would have become no longer subject to the Company’s
repurchase right within the one (1) year period after the Executive’s Date of
Resignation.

(vi) pay the cost of outplacement assistance services for Executive that are
actually provided by an outplacement agency selected by Executive, 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 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.]

[Note: The following severance benefits would apply if the Executive has an
Involuntary Termination Associated With a Change in Control]

(i) [to pay to Executive a lump sum payment equal to (A) 2 times Base Pay (as
defined in the Severance Agreement), plus (B) 2 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 twenty-four (24) 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

 

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[pay Executive cash in a lump sum payment equal to Executive’s after-tax cost of
continuing comparable medical and dental coverage for the twenty-four (24) 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 twenty-four (24) 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
twenty-four (24) 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 twenty-four (24) 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)j. [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.]

 

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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,

 

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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;

 

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(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.

[SIGNATURE PAGE FOLLOWS]

 

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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:        

 

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