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SEVERANCE AGREEMENT

Termination Severance Agreement

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NOVELL, INC

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Title: SEVERANCE AGREEMENT
Governing Law: Massachusetts     Date: 1/13/2005
Industry: SOFTWR     Sector: TECHNO

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Exhibit 10.15

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

 

 

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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

 

 

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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

 

 

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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

 

 

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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.

 

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(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

 

 

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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

 

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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

 

 

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(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 t

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