SEVERANCE AGREEMENT AND RELEASE RECITALS
EXHIBIT
10.34
RECITALS
This
Severance Agreement and Release (“Agreement”)
is
made by and between
Xxxxxxxxxxx X. Xxxxxx (“Employee”)
and
Hi/fn, Inc. (“Company”)
(collectively referred to as the “Parties”):
WHEREAS,
Employee was employed by the Company;
WHEREAS,
the Company and Employee entered into the Severance and Change of Control
Agreement, effective May 16, 2005 (the “Severance
Agreement”);
WHEREAS,
the Company and Employee entered into a Proprietary Information and
Inventions Agreement (the “Confidentiality
Agreement”);
WHEREAS,
Employee’s employment with Company and status as a member of the Board of
Directors terminated on November 10, 2006 (the “Termination
Date”);
WHEREAS,
the Parties, and each of them, wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that the
Employee may have against the Company as defined herein, including, but not
limited to, any and all claims arising or in any way related to Employee’s
employment with, or separation from, the Company;
NOW
THEREFORE, in consideration of the promises made herein, the Parties hereby
agree as follows:
COVENANTS
1. Resignation.
Employee hereby acknowledges and reaffirms his resignation as the Company’s
President and Chief Executive Officer and a member of the Company’s Board of
Directors effective as of the Termination Date
and from
all other officer, employee and director positions with the Company and its
affiliates.
2. Consideration.
(a) Severance
Pay.
Subject
to this Agreement becoming effective (as set forth in Section 24), the Company
will pay Employee $185,000 on its first regularly scheduled payroll date
following the date six (6) months and one day following the Termination Date
and
will pay Employee $15,416.66 on each regularly scheduled payroll date thereafter
through the last payroll date on or before the date twelve (12) months following
the Termination Date, in accordance with the Company’s normal payroll
policies.
(b) Benefits.
Subject
to this Agreement becoming effective (as set forth in Section 24), the Company
will promptly reimburse Employee for the same level of medical, dental and/or
vision coverage and benefits as in effect for Employee and his spouse on the
day
immediately
preceding the Termination Date,
provided (i) Employee constitutes a qualified beneficiary, as
defined
in Section 4980(B)(g)(1) of the Internal Revenue Code of 1986, as amended;
and
(ii) Employee elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”),
within the time period prescribed pursuant to COBRA. The Company will continue
to reimburse Employee for continuation coverage (at a level of coverage no
less
favorable than that provided as of the day immediately preceding the Termination
Date) until the earlier of (A) the date Employee (or his spouse, as applicable)
is no longer eligible to receive continuation coverage pursuant to COBRA, (B)
the date upon which Employee and his eligible dependents become covered by
similar plans, or (C) twelve (12) months from the Termination Date. Employee
will be responsible for the payment of COBRA premiums (including, without
limitation, all administrative expenses) for the remaining COBRA
period.
(c) Consulting.
Commencing on the Termination Date and subject to this Agreement becoming
effective (as set forth in Section 24), Employee will make himself available
to
serve as a consultant to the Company through the date twelve (12) months
following the Termination Date, pursuant to the written consulting agreement
(the “Consulting
Agreement”)
attached hereto as Exhibit
A.
3. Confidential
Information.
Employee will continue to maintain the confidentiality of all confidential
and
proprietary information of the Company and will continue to comply with the
terms and conditions of the Confidentiality Agreement between Employee and
the
Company. Employee will return all of the Company’s property and confidential and
proprietary information in his possession to the Company on the Effective Date
of this Agreement.
4. Payment
of Salary.
Employee acknowledges and represents that the Company has paid all salary,
wages, bonuses, accrued vacation, commissions and any and all other benefits
due
to Employee once the above noted payments and benefits are
received.
5. Release
of Claims.
Employee agrees that the foregoing consideration represents settlement in full
of all outstanding obligations owed to Employee by the Company and its officers,
managers, supervisors, agents and employees. Employee, on his own behalf, and
on
behalf of his respective heirs, family members, executors, agents, and assigns,
hereby fully and forever releases the Company and its officers, directors,
employees, agents, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns
(the “Releasees”),
from,
and agrees not to xxx concerning, any claim, duty, obligation or cause of action
relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that Employee may possess arising from any omissions,
acts or facts that have occurred up until and including the Effective Date
of
this Agreement including, without limitation:
(a) any
and
all claims relating to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;
(b) any
and
all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation,
any
claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law, and securities fraud under any state
or
federal law;
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(c) any
and
all claims under the law of any jurisdiction including, but not limited to,
wrongful discharge of employment; constructive discharge from employment;
termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of a covenant
of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; negligent or
intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices;
defamation; libel; slander; negligence; personal injury; assault; battery;
invasion of privacy; false imprisonment; and conversion;
(d) any
and
all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, The Worker Adjustment and Retraining
Notification Act, Older Workers Benefit Protection Act, the Family and Medical
Leave Act, the California Family Rights Act, the California Fair Employment
and
Housing Act, and the California Labor Code, including, but not limited to
California Labor Code Sections 1400-1408;
(e) any
and
all claims for violation of the federal, or any state, constitution;
(f) any
and
all claims arising out of any other laws and regulations relating to employment
or employment discrimination;
(g) any
claim
for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by
Employee as a result of this Agreement; and
(h) any
and
all claims for attorneys’ fees and costs.
The
Company and Employee agree that the release set forth in this section will
be
and remain in effect in all respects as a complete general release as to the
matters released. This release does not extend to any obligations incurred
under
this Agreement.
6. Acknowledgement
of Waiver of Claims Under ADEA.
Employee acknowledges that he is waiving and releasing any rights he may have
under the Age Discrimination in Employment Act of 1967 (“ADEA”)
and
that this waiver and release is knowing and voluntary. Employee and the Company
agree that this waiver and release does not apply to any rights or claims that
may arise under ADEA after the Effective Date of this Agreement. Employee
acknowledges that the consideration given for this waiver and release Agreement
is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that he has been advised by this writing that
(a) he
should
consult with an attorney prior
to
executing this Agreement;
(b) he
has up
to twenty-one (21) days within which to consider this
Agreement;
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(c) he
has
seven (7) days following his execution of this Agreement to revoke this
Agreement;
(d) this
ADEA
waiver will not be effective until the seven (7) day revocation period has
expired; and
(e) nothing
in this Agreement prevents or precludes Employee from challenging or seeking
a
determination in good faith of the validity of this waiver under the ADEA,
nor
does it impose any condition precedent, penalties or costs for doing so, unless
specifically authorized by federal law.
7. Civil
Code Section 1542.
The
Parties represent that they are not aware of any claim by either of them other
than the claims that are released by this Agreement. Employee acknowledges
that
he had the opportunity to seek the advice of legal counsel and is familiar
with
the provisions of California Civil Code Section 1542, which provides as
follows:
A
GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Employee,
being aware of said code section, agrees to expressly waive any rights he may
have thereunder, as well as under any other statute or common law principles
of
similar effect.
8. No
Pending or Future Lawsuits.
Employee represents that he has no lawsuits, claims, or actions pending in
his
name, or on behalf of any other person or entity, against the Company or any
other person or entity referred to herein. Employee also represents that he
does
not intend to bring any claims on his own behalf or on behalf of any other
person or entity against the Company or any other person or entity referred
to
herein.
9. No
Cooperation.
Employee agrees he will not act in any manner that might damage the business
of
the Company. Employee agrees that he will not counsel or assist any attorneys
or
their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the
Company and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company, unless under a subpoena or other court
order to do so. Employee further agrees both to immediately notify the Company
upon receipt of any court order, subpoena, or any legal discovery device that
seeks or might require the disclosure or production of the existence or terms
of
this Agreement, and to furnish, within three (3) business days of its receipt,
a
copy of such subpoena or legal discovery device to the Company.
10. Non-Solicitation.
Employee agrees that for a period of twelve (12) months immediately following
the Termination Date, Employee will not, either directly or indirectly, whether
as an employee, owner, sole proprietor, partner, director, member, consultant,
agent, founder, co-venturer or otherwise, (i) solicit, induce, or influence
any
person to leave employment with the Company, or (ii) directly or indirectly
solicit business from any of the Company’s
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customers
and users on behalf of any business that directly competes with the principal
business of the Company.
11. Non-Disparagement.
Employee agrees to refrain from any defamation, libel or slander of the Company
or its affiliates or tortious interference with the contracts and relationships
of the Company or its affiliates. All inquiries by potential future employers
of
Employee will be directed to the Company’s General Counsel. Upon inquiry, the
Company will only state the following: Employee’s last position and dates of
employment.
12. No
Admission of Liability.
The
Parties understand and acknowledge that this Agreement constitutes a compromise
and settlement of disputed claims. No action taken by the Parties hereto, or
either of them, either previously or in connection with this Agreement, will
be
deemed or construed to be (a) an admission of the truth or falsity of any claims
heretofore made or (b) an acknowledgment or admission by either party of any
fault or liability whatsoever to the other party or to any third
party.
13. No
Knowledge of Wrongdoing.
Employee represents that he has no knowledge of any wrongdoing involving
improper or false claims against a federal or state governmental agency, or
any
other wrongdoing that involves Employee or other present or former Company
employees.
14. Costs.
The
Parties will each bear their own costs, expert fees, attorneys’ fees and other
fees incurred in connection with this Agreement.
15. Arbitration.
The
Parties agree that any and all disputes arising out of, or relating to, the
terms of this Agreement, their interpretation, and any of the matters herein
released, will be subject to binding arbitration in Santa Xxxxx County before
the Judicial Arbitration & Mediation Services (“JAMS”)
pursuant to its employment arbitration rules & procedures (“JAMS
Rules”).
The
arbitrator shall administer and conduct any arbitration in accordance with
California law, including the California Code of Civil Procedure, and the
arbitrator shall apply substantive and procedural California law to any dispute
or claim, without reference to any conflict-of-law provisions of any
jurisdiction. To the extent that the JAMS Rules conflict with California law,
California law shall take precedence. The Parties agree that the prevailing
party in any arbitration will be entitled to injunctive relief in any court
of
competent jurisdiction to enforce the arbitration award. The Parties agree
that
the prevailing party in any arbitration will be awarded its reasonable
attorneys’ fees and costs. The
Parties hereby agree to waive their right to have any dispute between them
resolved in a court of law by a judge or jury. This
section will not prevent either party from seeking injunctive relief (or any
other provisional remedy) from any court having jurisdiction over the Parties
and the subject matter of their dispute relating to Employee’s obligations under
this Agreement and the agreements incorporated herein by reference.
16. Authority.
The
Company represents and warrants that the undersigned has the authority to act
on
behalf of the Company and to bind the Company and all who may claim through
it
to the terms and conditions of this Agreement. Employee represents and warrants
that he has the capacity to act on his own behalf and on behalf of all who
might
claim through him to bind them to the terms and conditions of this Agreement.
Each party warrants and represents that there are no liens
or
claims of lien or assignments in law or equity or otherwise of or against any
of
the claims or causes of action released herein.
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17. No
Representations.
Each
party represents that it has had the opportunity to consult with an attorney,
and has carefully read and understands the scope and effect of the provisions
of
this Agreement. Neither party has relied upon any representations or statements
made by the other party hereto which are not specifically set forth in this
Agreement.
18. Severability.
In the
event that any provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement will continue
in full force and effect without said provision so long as the remaining
provisions remain intelligible and continue to reflect the original intent
of
the Parties.
19. Entire
Agreement.
This
Agreement represents the entire agreement and understanding between the Company
and Employee concerning the subject matter of this Agreement and Employee’s
relationship with the Company, and supersedes and replaces any and all prior
agreements and understandings between the Parties concerning the subject matter
of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement and any agreements relating to
Employee’s outstanding equity awards with the Company.
20. No
Waiver.
The
failure of any party to insist upon the performance of any of the terms and
conditions in this Agreement, or the failure to prosecute any breach of any
of
the terms and conditions of this Agreement, will not be construed thereafter
as
a waiver of any such terms or conditions. This entire Agreement will remain
in
full force and effect as if no such forbearance or failure of performance had
occurred.
21. No
Oral Modification.
Any
modification or amendment of this Agreement, or additional obligation assumed
by
either party in connection with this Agreement, will be effective only if placed
in writing and signed by both Parties or by authorized representatives of each
party.
22. Governing
Law.
This
Agreement will be deemed to have been executed and delivered within the State
of
California, and it will be construed, interpreted, governed, and enforced in
accordance with the laws of the State of California, without regard to conflict
of law principles. To the extent that either party seeks injunctive relief
in
any court having jurisdiction for any claim relating to the alleged misuse
or
misappropriation of trade secrets or confidential or proprietary information,
each party hereby consents to personal and exclusive jurisdiction and venue
in
the state and federal courts of the State of California.
23. Attorneys’
Fees.
In the
event that either Party brings an action to enforce or effect its rights under
this Agreement, the prevailing party will be entitled to recover its costs
and
expenses, including the costs of mediation, arbitration, litigation, court
fees,
plus reasonable attorneys’ fees, incurred in connection with such an
action.
24. Effective
Date.
This
Agreement is effective after it has been signed by both parties and after seven
(7) days have passed since Employee has signed the Agreement (the “Effective
Date”),
unless revoked by Employee within seven (7) days after the date the Agreement
was signed by Employee.
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25. Counterparts.
This
Agreement may be executed in counterparts, and each counterpart will have the
same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.
26. Voluntary
Execution of Agreement.
This
Agreement is executed voluntarily and without any duress or undue influence
on
the part or behalf of the Parties hereto, with the full intent of releasing
all
claims. The Parties acknowledge that:
(a) They
have
read this Agreement;
(b) They
have
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel;
(c) They
understand the terms and consequences of this Agreement and of the releases
it
contains; and
(d) They
are
fully aware of the legal and binding effect of this Agreement.
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
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Hi/fn
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Dated:
November 16, 2006
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By
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
Vice
President of Finance, Chief Financial Officer
and
Secretary
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XXXXXXXXXXX
X. XXXXXX, an individual
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Dated:
November 16, 2006
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By
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/s/
Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx
X. Xxxxxx
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