EXHIBIT 10.34
 
SEVERANCE AGREEMENT AND RELEASE
 
RECITALS
 
 
This Severance Agreement and Release (“Agreement”) is made by and between
Christopher G. Kenber (“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

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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 sue
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 Clara
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.

     
 
Hi/fn
 
Dated: November 16, 2006
 
 
By
 
/s/ William R. Walker   
     
William R. Walker
Vice President of Finance, Chief Financial Officer
and Secretary

     
 
CHRISTOPHER G. KENBER, an individual
 
Dated: November 16, 2006
 
 
By
 
/s/ Christopher G. Kenber   
     
Christopher G. Kenber

    
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