HI/FN, INC. CONSULTING AGREEMENT
EXHIBIT
10.35
HI/FN,
INC.
This
Consulting Agreement (“Agreement”)
is
entered into as of November 16, 2006 by and between Hi/fn, Inc. (the
“Company”)
and
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (“Consultant”).
The
Company desires to retain Consultant as an independent contractor to perform
consulting services for the Company, and Consultant is willing to perform such
services, on the terms described below. In consideration of the mutual promises
contained herein, the parties agree as follows:
1. Services
and Compensation.
Consultant agrees to perform for the Company the services described in
Exhibit A
(the
“Services”),
and
the Company agrees to pay Consultant the compensation described in Exhibit A
for
Consultant’s performance of the Services.
2. Confidentiality.
A. Definition.
“Confidential
Information”
means
any non-public information that relates to the actual or anticipated business
or
research and development of the Company, technical data, trade secrets or
know-how, including, but not limited to, research, product plans or other
information regarding Company’s products or services and markets therefor,
customer lists and customers (including, but not limited to, customers of the
Company on whom Consultant called or with whom Consultant became acquainted
during the term of this Agreement), software, developments, inventions,
processes, formulas, technology, designs, drawing, engineering, hardware
configuration information, marketing, finances or other business information.
Confidential Information does not include information that (i) is known to
Consultant at the time of disclosure to Consultant by the Company as evidenced
by written records of Consultant, (ii) has become publicly known and made
generally available through no wrongful act of Consultant or (iii) has been
rightfully received by Consultant from a third party who is authorized to make
such disclosure.
B. Nonuse
and Nondisclosure.
Consultant will not, during or subsequent to the term of this Agreement,
(i) use the Confidential Information for any purpose whatsoever other than
the performance of the Services on behalf of the Company or (ii) disclose
the Confidential Information to any third party. Consultant agrees that all
Confidential Information will remain the sole property of the Company.
Consultant also agrees to take all reasonable precautions to prevent any
unauthorized disclosure of such Confidential Information. Without the Company’s
prior written approval, Consultant will not directly or indirectly disclose
to
anyone the existence of this Agreement or the fact that Consultant has this
arrangement with the Company.
C. Former
Client Confidential Information.
Consultant agrees that Consultant will not, during the term of this Agreement,
improperly use or disclose any proprietary information or trade secrets of
any
former or current employer of Consultant or other person or entity with which
Consultant has an agreement or duty to keep in confidence information acquired
by Consultant, if any. Consultant also agrees that Consultant will not bring
onto the Company’s premises any unpublished document or proprietary information
belonging to any such employer, person or entity unless consented to in writing
by such employer, person or entity.
D. Third
Party Confidential Information.
Consultant recognizes that the Company has received and in the future will
receive from third parties their confidential or proprietary information subject
to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Consultant agrees
that, during the term of this Agreement and thereafter, Consultant owes the
Company and such third parties a duty to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it
to
any person, firm or corporation or to use it except as necessary in carrying
out
the Services for the Company consistent with the Company’s agreement with such
third party.
E. Return
of Materials.
Upon
the termination of this Agreement, or upon Company’s earlier request, Consultant
will deliver to the Company all of the Company’s property, including but not
limited to all electronically stored information and passwords to access such
property, or Confidential Information that Consultant may have in Consultant’s
possession or control.
3. Conflicting
Obligations.
A. Conflicts.
Consultant certifies that Consultant has no outstanding agreement or obligation
that is in conflict with any of the provisions of this Agreement or that would
preclude Consultant from complying with the provisions of this Agreement.
Consultant will not enter into any such conflicting agreement during the term
of
this Agreement. Consultant’s violation of this Section 3.A
will be
considered a material breach under Section 5.B.
4. Reports.
Consultant also agrees that Consultant will, from time to time during the term
of this Agreement or any extension thereof, keep the Company advised as to
Consultant’s progress in performing the Services under this Agreement.
Consultant further agrees that Consultant will, as requested by the Company,
prepare written reports with respect to such progress. The Company and
Consultant agree that the time required to prepare such written reports will
be
considered time devoted to the performance of the Services.
5. Term
and Termination.
A. Term.
The
term of this Agreement will begin on the date of this Agreement and will
continue until the earlier of (i) November 10, 2007 or
(ii) termination as provided in Section 5.B.
B. Termination.
Consultant
may terminate this Agreement upon giving the Company 14 days’ prior written
notice of such termination pursuant to Section 9.E
of this
Agreement.
The
Company may terminate this Agreement immediately and without prior notice for
Cause. For purposes of this Agreement, “Cause”
shall
mean Consultant’s refusal or inability to perform the Services or Consultant’s
breach of any material provision of this Agreement, the
Proprietary Information and Inventions Agreement or the Severance Agreement
and Release by and between Consultant and the Company dated November 16,
2006.
C. Survival.
Upon
such termination, all rights and duties of the Company and Consultant toward
each other shall cease except:
(1) The
Company will pay, within 30 days after the effective date of termination, all
amounts owing to Consultant for Services completed and accepted by the Company
prior to the termination date and related expenses, if any, submitted in
accordance with the Company’s policies and in accordance with the provisions of
Section 1
of this
Agreement; and
(2) Section 2
(Confidentiality), Section 3
(Conflicting Obligations), Section 6
(Independent Contractor; Benefits), Section 7 (Indemnification),
and Section 8
(Arbitration and Equitable Relief) will survive termination of this
Agreement.
6. Independent
Contractor; Benefits.
A. Independent
Contractor. It
is the
express intention of the Company and Consultant that Consultant perform the
Services as an independent contractor to the Company. Nothing in this Agreement
shall in any way be construed to constitute Consultant as an agent, employee
or
representative of the Company. Without limiting the generality of the foregoing,
Consultant is not authorized to bind the Company to any liability or obligation
or to represent that Consultant has any such authority. Consultant agrees to
furnish (or reimburse the Company for) all tools and materials necessary to
accomplish this Agreement and shall incur all expenses associated with
performance, except as expressly provided in Exhibit A.
Consultant acknowledges and agrees that Consultant is obligated to report as
income all compensation received by Consultant pursuant to this Agreement.
Consultant agrees to and acknowledges the obligation to pay all self-employment
and other taxes on such income.
B. Benefits.
The
Company and Consultant agree that Consultant will receive no Company-sponsored
benefits from the Company. If Consultant is reclassified by a state or federal
agency or court as Company’s employee, Consultant will become a reclassified
employee and will receive no benefits from the Company, except those mandated
by
state or federal law, even if by the terms of the Company’s benefit plans or
programs of the Company in effect at the time of such reclassification,
Consultant would otherwise be eligible for such benefits.
7. Indemnification.
Consultant agrees to indemnify and hold harmless the Company and its directors,
officers and employees from and against all taxes, losses, damages, liabilities,
costs and expenses, including attorneys’ fees and other legal expenses, arising
directly or indirectly from or in connection with (i) any negligent,
reckless or intentionally wrongful act of Consultant or Consultant’s assistants,
employees or agents, (ii) a determination by a court or agency that the
Consultant is not an independent contractor, (iii) any breach by the
Consultant or Consultant’s assistants, employees or agents of any of the
covenants contained in this Agreement, (iv) any failure of Consultant to perform
the Services in accordance with all applicable laws, rules and regulations,
or
(v) any violation or claimed violation of a third party’s rights resulting
in whole or in part from the Company’s use of the work product of Consultant
under this Agreement.
8. Arbitration
and Equitable Relief.
A. Arbitration.
Consultant agrees that any and all controversies, claims or disputes with anyone
(including the Company and any employee, officer, director, shareholder or
benefit plan of the Company, in its capacity as such or otherwise) arising
out
of, relating to or resulting from Consultant’s performance of the Services under
this Agreement or the termination of this Agreement, including any breach of
this Agreement, shall be subject to binding arbitration under the Arbitration
Rules set forth in California Code of Civil Procedure Section 1280 through
1294.2, including Section 1283.05 (the “Rules”)
and
pursuant to California law. CONSULTANT AGREES TO ARBITRATE, AND THEREBY AGREES
TO WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO, ALL DISPUTES ARISING
FROM
OR RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO: ANY STATUTORY CLAIMS
UNDER STATE OR FEDERAL LAW, CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT
OF
1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE FAMILY
AND
MEDICAL LEAVE ACT, THE CALIFORNIA FAMILY RIGHTS ACT, THE CALIFORNIA FAIR
EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA LABOR CODE, CLAIMS OF HARASSMENT,
DISCRIMINATION OR WRONGFUL TERMINATION AND ANY STATUTORY CLAIMS. Consultant
understands that this Agreement to arbitrate also applies to any disputes that
the Company may have with Consultant.
B. Procedure.
Consultant agrees that any arbitration will be administered by the Judicial
Arbitration & Mediation Services (“JAMS”), and that a neutral arbitrator
will be selected in a manner consistent with its employment arbitration rules
& procedures (“JAMS Rules”). Consultant agrees that the arbitrator will have
the power to decide any motions brought by any party to the arbitration,
including discovery motions, motions for summary judgment and/or adjudication
and motions to dismiss and demurrers, prior to any arbitration hearing.
Consultant agrees that the arbitrator will issue a written decision on the
merits. Consultant also agrees that the arbitrator will have the power to award
any remedies, including attorneys’ fees and costs, available under applicable
law. Consultant understands that the Company will pay for any administrative
or
hearing fees charged by the arbitrator or JAMS, except that Consultant shall
pay
the amount of any filing fees associated with any arbitration Consultant
initiates that Consultant would have otherwise had to pay had he filed any
such
claim in court. Consultant agrees that the arbitrator will administer and
conduct any arbitration in a manner consistent with the Rules and that, to
the
extent that JAMS Rules conflict with the Rules, the Rules will take
precedence.
C. Remedy.
Except
as provided by the Rules, arbitration will be the sole, exclusive and final
remedy for any dispute between the Company and Consultant. Accordingly, except
as provided for by the Rules, neither the Company nor Consultant will be
permitted to pursue court action regarding claims that are subject to
arbitration. Notwithstanding the foregoing, the arbitrator will not have the
authority to disregard or refuse to enforce any lawful Company policy, and
the
arbitrator shall not order or require the Company to adopt a policy not
otherwise required by law which the Company has not adopted.
D. Availability
of Injunctive Relief.
In
addition to the right under the Rules to petition the court for provisional
relief, Consultant agrees that any party may also petition the court
for
injunctive relief where either party alleges or claims a violation of
Sections 2
(Confidentiality) or 3
(Conflicting Obligations) of this Agreement or any other agreement regarding
trade secrets, confidential information, nonsolicitation or Labor Code §2870. In
the event either the Company or Consultant seeks injunctive relief, the
prevailing party will be entitled to recover reasonable costs and attorneys’
fees.
E. Administrative
Relief.
Consultant understands that this Agreement does not prohibit Consultant from
pursuing an administrative claim with a local, state or federal administrative
body such as the Department of Fair Employment and Housing, the Equal Employment
Opportunity Commission or the workers’ compensation board. This Agreement does,
however, preclude Consultant from pursuing court action regarding any such
claim.
F. Voluntary
Nature of Agreement.
Consultant acknowledges and agrees that Consultant is executing this Agreement
voluntarily and without any duress or undue influence by the Company or anyone
else. Consultant further acknowledges and agrees that Consultant has carefully
read this Agreement and has asked any questions needed to understand the terms,
consequences and binding effect of this Agreement and fully understand it,
including that Consultant is waiving its right to a jury trial. Finally,
Consultant agrees that Consultant has been provided an opportunity to seek
the
advice of an attorney of its choice before signing this Agreement.
9. Miscellaneous.
A. Governing
Law.
This
Agreement shall be governed by the laws of California without regard to
California’s conflicts of law rules.
B. Assignability.
Except
as otherwise provided in this Agreement, Consultant may not sell, assign or
delegate any rights or obligations under this Agreement.
C. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter of this Agreement and supersedes all prior written and oral
agreements between the parties regarding the subject matter of this Agreement,
with the exception of the Proprietary Information and Inventions Agreement,
the Severance Agreement and Release by and between Consultant and the Company
dated November 16, 2006 and any agreements relating to Employee’s outstanding
equity awards with the Company.
D. Headings.
Headings are used in this Agreement for reference only and shall not be
considered when interpreting this Agreement.
E. Notices.
Any
notice or other communication required or permitted by this Agreement to be
given to a party shall be in writing and shall be deemed given if delivered
personally or by commercial messenger or courier service, or mailed by U.S.
registered or certified mail (return receipt requested), to the party at the
party’s address written below or at such other address as the party may have
previously specified by like notice. If by mail, delivery shall be deemed
effective three business days after mailing in accordance with this Section 9.E.
(1) If
to the
Company, to:
Hi/fn,
Inc.
Attention:
General Counsel
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇)
▇▇▇-▇▇▇▇
(▇▇▇)
▇▇▇-▇▇▇▇
(2) If
to
Consultant, to the address for notice on the signature page to
this
Agreement or, if no such address is provided, to the last address of Consultant
provided by Consultant to the Company.
F. Attorneys’
Fees.
In any
court action at law or equity that is brought by one of the parties to this
Agreement to enforce or interpret the provisions of this Agreement, the
prevailing party will be entitled to reasonable attorneys’ fees, in addition to
any other relief to which that party may be entitled.
G. Severability.
If any
provision of this Agreement is found to be illegal or unenforceable, the other
provisions shall remain effective and enforceable to the greatest extent
permitted by law.
IN
WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
as
of the date first written above.
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CONSULTANT
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HI/FN,
INC.
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By:
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/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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Name:
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▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title:
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Vice
President of Finance, Chief Financial Officer and
Secretary
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Address
for Notice:
EXHIBIT
A
Services
and Compensation
1. Contact.
Consultant’s principal Company contact:
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Interim Chief Executive Officer and Chairman of the Board of
Directors
2. Services.
The
Services shall include, but shall not be limited to, the following:
Consultant
will provide consulting and advisory services relating to matters and projects
or work in process that had been within the Consultant’s areas of responsibility
while he served as Chief Executive Officer of the Company, including, without
limitation, such appropriate tasks as the Company’s Board of Directors (the
“Board”)
may
request as necessary and appropriate to assist his successor to transition
into
the position of the Company’s Chief Executive Officer and traveling to key
customers of the Company. Consultant will be required to provide up to twenty
(20) hours per month (as requested by the Company) in Services under this
Agreement.
3. Compensation.
A. The
Company will pay Consultant $2,000.00 per month.
B. The
Company will reimburse Consultant for all reasonable expenses incurred by
Consultant in performing the Services pursuant to this Agreement, if Consultant
receives written consent from an authorized agent of the Company prior to
incurring such expenses and submits receipts for such expenses to the Company
in
accordance with Company policy.