EXHIBIT
10.33
HI/FN, INC.
ALBERT E. SISTO EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is entered into as of November 16, 2006,
by and between Hi/fn, Inc. (the “Company”) and Albert
E. Sisto (“Executive”).
1. Duties and Scope of Employment
.
(a) Positions and Duties . As of November 9, 2006 (the “Effective
Date”), Executive will serve as the Company’s Interim
Chief Executive Officer. Executive will report to the
Company’s Board of Directors (the “Board”) and
will continue in his role as Chairman of the Board. As of the
Effective Date, Executive will render such business and
professional services in the performance of his duties, consistent
with Executive’s position within the Company, as will
reasonably be assigned to him by the Board. The period Executive is
employed by the Company under this Agreement is referred to herein
as the “Employment Term”.
Subject to the termination and notice provisions
herein, Executive agrees to remain employed with the Company until
the date upon which a successor Chief Executive Officer commences
employment with the Company. However, in the event that the Company
desires to retain Executive as its regular Chief Executive Officer,
then this Agreement will be terminated and the parties hereto will
negotiate a new employment agreement covering the terms and
conditions of Executive’s ongoing role.
(b) Board Membership . Executive was appointed to serve as a member
of the Board prior to the Effective Date and was appointed Chairman
of the Board on the Effective Date. During the Employment Term, at
each annual meeting of the Company’s stockholders at which
Executive’s term as a member of the Board has otherwise
expired, the Company will nominate Executive to serve as a member
of the Board. Executive’s service as a member of the Board
will be subject to any required stockholder approval. Upon the
termination of Executive’s employment for any reason, unless
otherwise requested by the Board, Executive will be deemed to have
resigned from all positions held at the Company and its affiliates,
except that of Chairman of the Board, voluntarily, without any
further required action by Executive, as of the end of
Executive’s employment and Executive, at the Board’s
request, will execute any documents necessary to reflect his
resignation.
(c) Obligations . During the Employment Term, Executive will
devote Executive’s full business efforts and time to the
Company and will use good faith efforts to discharge
Executive’s obligations under this Agreement to the best of
Executive’s ability and in accordance with each of the
Company’s corporate guidance and ethics guidelines, conflict
of interests policies and code of conduct. For the duration of the
Employment Term, Executive agrees not to actively engage in any
other employment, occupation, or consulting activity for any direct
or indirect remuneration without the prior approval of the Board
(which approval will not be unreasonably withheld); provided,
however, that Executive may, without the approval of the Board,
serve in any capacity with any civic, educational, or charitable
organization, provided such services do not interfere with
Executive’s obligations to Company. Executive expects to
serve as a member of the Board of Directors of Digital Signal
Corporation, Tulip Ego Lifestyle, and Validity Sensors, Inc. and
such service will not constitute a violation of this section
1(c).
Executive hereby represents
and warrants to the Company that Executive is not party to any
contract, understanding, agreement or policy, written or otherwise,
that would be breached by Executive’s entering into, or
performing services under, this Agreement. Executive further
represents that he has disclosed to the Company in writing all
threatened, pending, or actual claims that are unresolved and still
outstanding as of the Effective Date, in each case, against
Executive of which he is aware, if any, as a result of his
employment with his current employer (or any other previous
employer) or his membership on any boards of directors.
(d) Other Entities . Executive agrees to serve and will be
appointed, without additional compensation, as an officer and
director for each of the Company’s subsidiaries,
partnerships, joint ventures, limited liability companies and other
affiliates, including entities in which the Company has a
significant investment as determined by the Company. As used in
this Agreement, the term “affiliates” will include any
entity controlled by, controlling, or under common control of the
Company.
2. At-Will Employment . Executive and the Company agree that
Executive’s employment with the Company constitutes
“at-will” employment. Executive and the Company
acknowledge that this employment relationship may be terminated at
any time, upon written notice to the other party, with or without
good cause or for any or no cause, at the option either of the
Company or Executive.
3. Compensation .
(a) Base Salary . As of the Effective Date, the Company will pay
Executive an annual salary of $350,000 as compensation for his
services (such annual salary, as is then effective, to be referred
to herein as “Base Salary”). The Base Salary will be
paid periodically in accordance with the Company’s normal
payroll practices and be subject to the usual, required
withholdings.
(b) Annual Incentive . Executive will be eligible to receive annual
cash incentives payable for the achievement of performance goals
established by the Board or by the Compensation Committee of the
Board (the “Committee”). During the Employment Term,
Executive’s target annual incentive (“Target Annual
Incentive”) will equal 65% of Executive’s Base Salary.
The actual earned annual cash incentive, if any, payable to
Executive for any performance period will depend upon the extent to
which the applicable performance goal(s) specified by the Committee
are achieved or exceeded and will be adjusted for under- or
over-performance.
(c) Stock Options .
(i)
Following the Effective Date, the
Committee will grant an option to purchase 225,000 shares of
Company common stock at a per share exercise price equal to the
closing price per share on the Nasdaq Global Market
(“Nasdaq”) for the common stock of the Company on the
date of grant (the “Option”). The Option will be
granted under and subject to the terms, definitions and provisions
of the Company’s Amended and Restated 1996 Equity Incentive
Plan (the “Plan”) and will be scheduled to vest 1/36
th of the shares subject to the Option each month
following the Effective Date, subject to Executive’s
continued employment with the Company as its Chief Executive
Officer (whether on an interim basis or otherwise) through each
scheduled vesting date. Upon Executive ceasing to be the
Company’s Chief Executive Officer (whether on an
interim
basis or otherwise), all vesting of the Option
will terminate immediately and the unvested portion of the Option
will immediately terminate. Notwithstanding the foregoing vesting
schedule, if during the first year of the Employment Term while
Executive is acting as the Company’s Chief Executive Officer,
the Company hires a successor Chief Executive Officer other than
Executive, the Option will immediately vest and become exercisable
as to 75,000 shares in addition to the number of shares subject to
the Option that have vested as of such date. Except as provided in
this Agreement, the Option will be subject to the Company’s
standard terms and conditions for options granted under the
Plan.
(ii)
Following the Effective Date, the
Committee will grant Executive 75,000 shares of restricted stock
(the “Stock Grant”). The Stock Grant will be granted
under and subject to the terms, definitions and provisions of the
Plan, and will vest six (6) months from the Effective Date, subject
to Executive’s continued employment with the Company as its
Chief Executive Officer on such date. Subject to the provisions of
Section 7 of this Agreement, upon Executive’s termination as
the Company’s Chief Executive Officer, all further vesting of
the Stock Grant will terminate immediately and such shares will be
forfeited to the Company at no cost to the Company. Notwithstanding
the foregoing, if during the first six (6) months of the Employment
Term, the Company hires a successor Chief Executive Officer other
than Executive, the Stock Grant will fully vest. Except as provided
in this Agreement, the Stock Grant will be subject to the
Company’s standard terms and conditions for restricted stock
granted under the Plan.
4. Employee Benefits .
(a) Generally . Executive will be eligible to participate in
ac
