Document:

exhibit10-24.htm

     

    Exhibit
      10.24

    [*] Confidential
      Treatment Requested

     

    July
      19,
      2007

     

    John
      Matze

    [Address]

    

     

    Re: 
Employment
      Offer

     

    Dear
      John:

     

    hi/fn,
      inc., a Delaware corporation (the “Company”), is
      pleased to offer you employment on the following terms:

     

    1. 
      Position.  Your initial title will be Vice Present of
      Business Development.  This is a full-time position and you will
      report to Albert E. Sisto, Chief Executive Officer of the
      Company.  You will allowed to participate in the determining the
      budget of the Business Development division.  You will be given the
      right to hire and terminate employees in the Business Development division,
      with
      the approval of the Chief Executive Officer of the Company, with such approval
      not to be unreasonably withheld.   By signing this offer letter,
      you confirm to the Company that you have no contractual commitments or other
      legal obligations that would prohibit you from performing your duties for the
      Company.

     

    2. 
      Your Location.  You will be employed to work at your
      current location in San Diego, California, and will not be required to relocate
      to the Company’s headquarters in Los Gatos, California.

     

    3. 
      Compensation.  

     

    (a) 
      Base Salary.  The Company will pay you a starting salary at the
      rate of $235,000 per year (the “Base Salary”), payable
      in accordance with the Company’s standard payroll schedule.  This
      salary will be subject to market adjustment pursuant to employee compensation
      policies in effect from time to time. 

     

    (b) 
      Bonus.    You will be entitled to an annual bonus of
      fifty percent (50%) of the Base Salary at one hundred percent (100%) of your
      assigned goals, in accordance with the Company’s Executive Bonus Plan, as
      approved by the Company’s Compensation Committee.

    

    4. 
      Employee Benefits.  As a regular employee of the
      Company, you will be eligible to participate in those Company-sponsored benefits
      that are available to all Company employees.  

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. 
      Equity Compensation.  

     

    (a) 
      Stock Option.  We will recommend to our Board of Directors (the
“Board”), that you be granted an incentive stock
      option (the “Option”) to purchase 60,000 shares (the
“Option Shares”) of Common Stock of
      the Company
      (“Common Stock”) in accordance with the Company’s
      Employee Stock Option Plan.  Twenty-Five percent (25%) of the Option
      Shares will vest immediately and the remaining Seventy-Five percent (75%) of
      the
      Option Shares will vest over the next forty-eight months of your continuous
      service to the Company, at the rate of one forty-eighth of the Option Shares
      per
      month until fully vested.  The Option will be subject to the terms and
      conditions set forth in the Company’s standard stock option agreement and
      Employee Stock Option Plan.  The Option’s beginning vesting date will
      be the day you begin employment with the Company.  The per share
      exercise price of the Option will be equal to the fair market value of the
      Common Stock at the close of market on the date the Option is granted by the
      Board.  

     

    (b) 
      Restricted Stock.  We will recommend to the Board, that you be
      granted an award of restricted stock, consisting of the right to purchase 75,000
      shares (the “Restricted Stock
Shares”) of Common Stock at
      a price
      equal to $0.01 per share (the “Restricted Stock
      Grant”). The Restricted Stock Shares issued pursuant to the
      Restricted Stock Grant will be subject to a right of repurchase in favor of
      the
      Company at the original purchase price (the “Right of
      Repurchase”).  The first 30,000 Restricted Stock Shares
      will vest on [*]  (the “First
      Milestone Vesting”) and the
      remaining 45,000 Restricted Stock Shares will vest upon
[*]  (the “Second Milestone
      Vesting”).  The release of Restricted Stock Shares from
      the Right of Repurchase will, of course, depend on your continued service with
      the Company.  Notwithstanding the provisions above, the Restricted
      Stock Shares will also have an acceleration provision triggered upon targets
      to
      be agreed to and approved by the Board or
      its
      Compensation Committee.  [*]

     

    (i) 
      Acceleration.  If the Company ceases selling the Systems for
      any reason (other than intellectual property infringement, applicable laws
      restrict the sale or the sale would cause the Company material hardship), (i)
      prior to the one year anniversary of the date of this offer letter, you will
      be
      entitled to the First Milestone Vesting and (ii) after the one year anniversary
      of the date of this offer letter but prior to the second year anniversary of
      the
      date of this offer letter, you will be entitled to the Second Milestone
      Vesting.  Notwithstanding the foregoing, the Restricted Stock Grant is
      also subject to acceleration pursuant to Section 9 herein.

    

    6. 
      Employee Invention and Confidentiality
      Agreement.  As an employee of the Company, you will have
      access to certain confidential information of the Company and you may, during
      the course of your employment, develop certain information or inventions that
      will be the property of the Company.  To protect the interests of the
      Company, you will need to sign the Company’s standard “Employee Invention
      Assignment and Confidentiality Agreement” as a condition of your
      employment.  We wish to impress upon you that we do not want you to,
      and we hereby direct you not to, bring with you any confidential or proprietary
      material of any former employer or to

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    violate
      any other obligations you may have to any former employer.  During the
      period that you render services to the Company, you agree to not engage in
      any
      employment, business or activity that is in any way competitive with the
      business or proposed business of the Company.  You will disclose to
      the Company in writing any other gainful employment, business or activity that
      you are currently associated with or participate in that competes with the
      Company.  You will not assist any other person or organization in
      competing with the Company or in preparing to engage in competition with the
      business or proposed business of the Company.  You represent that your
      signing of this offer letter, agreement(s) concerning stock options granted
      to
      you, if any, under the Plan (as defined below) and the
      Company’s
      Employee Invention Assignment and Confidentiality Agreement and your
      commencement of employment with the Company will not violate any agreement
      currently in place between yourself and current or past
      employers.

     

    7. 
      Employment Relationship.

     

    (a) 
“At-Will”
      Employment.  Subject to the terms and conditions of Section 8,
      your employment with the Company is for no specific period of
      time.  Your employment with the Company will be “at will,” meaning
      that either you or the Company may terminate your employment at any time and
      for
      any reason, with or without cause.  Any contrary representations that
      may have been made to you are superseded by this offer letter.  This
      is the full and complete agreement between you and the Company on this
      term.  Although your job duties, title, compensation and benefits, as
      well as the Company’s personnel policies and procedures, may change from time to
      time, the “at will” nature of your employment may only be changed in an express
      written agreement signed by you and a duly authorized officer of the Company
      (other than you).

     

    (b) 
      Termination.  Your employment may be terminated by you
      or by the Company at any time for any reason as follows:

     

    (i)    
      You may terminate your employment upon written notice to the Board for Good
      Reason (as defined below) (an “Involuntary
      Termination”);

     

    (ii)   
      You may terminate your employment upon written notice to the Board at any time
      in your discretion without Good Reason (a “Voluntary
      Termination”);

     

    (iii) 
      The Company may terminate your employment upon written notice to you at any
      time
      following a determination that there is Cause (as defined below), (a
“Termination for Cause”);

     

    (iv)  The
      Company may terminate your employment upon written notice to you at any time
      without Cause for such termination (a “Termination without
      Cause”);

     

    (v)  
      Your employment will automatically terminate upon your death or upon your
      disability as determined by the Board (a “Termination for Death or
Disability”);
      provided, that, “disability” is as defined under Section 409A of
      the Internal Revenue Code of 1986, as
      amended.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    8. 
      Definitions.  As used in this offer letter, the following terms
      have the following meanings:

     

    (a) 
      “Good Reason” means any of the following taken
      without your consent and with written notice to the Company and the Company
      fails to cure within thirty (30) days of written notice: (i) a material
      reduction in your duties or responsibilities that is inconsistent with your
      position as Vice President of Business Development of the Company; (ii) a
      requirement by the Company that you relocate your principal office to a facility
      more than sixty (60) miles from San Diego, California or (iii) a reduction
      in
      your annual base salary by more than ten percent (10%) (other than in connection
      with a general decrease in the salary of all similarly situated employees of
      the
      Company).

     

    (b) 
      “Cause” means your (i) failure to substantially
      perform, or gross negligence in the performance of, your duties after there
      has
      been delivered to you a written demand for performance which describes the
      specific deficiencies in your performance and the specific manner in which
      your
      performance must be improved, and which provides thirty (30) days from the
      date
      of notice to remedy such performance deficiencies; (ii) commission of any act
      of
      fraud, gross misconduct or dishonesty with respect to the Company; (iii)
      conviction of, or plea of guilty or “no contest” to, a felony or a crime
      involving moral turpitude; (iv) breach of any material provision of this offer
      letter, the Non-Competition Agreement (as defined below), the Employee Invention
      Assignment and Confidentiality Agreement or any other agreement with the
      Company; or (v) the repeated refusal to follow  clear, lawful and
      reasonable directives of the Board or any Board committee, which is material
      to
      the Company, after written notice of such failure and a reasonably opportunity
      to cure such failure.

     

    9. 
      Separation Benefits.  Upon termination of your employment with
      the Company for any reason, you will receive payment for all unpaid salary
      and
      vacation accrued as of the date of your termination of employment, and your
      benefits will be continued under the Company’s then existing benefit plans and
      policies for so long as provided under the terms of such plans and policies
      and
      as required by applicable law.  Under certain circumstances and
      conditioned upon your execution of a release and waiver of all claims, in a
      form
      acceptable to the Company, against the Company and its officers, directors
      and
      affiliates, the return of any Company property you may then hold, you will
      also
      be entitled to receive severance benefits as set forth below.

     

    (a) 
In
      the event
      of your Voluntary Termination, Termination for Cause, or Termination for Death
      or Disability, you will not be entitled to any cash severance benefits or
      additional vesting of the Option, the Restricted Stock Grant (except as provided
      in Section 9(b), or any other Company equity awards you then hold.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      (b)   In
        the event of your Voluntary Termination or Termination for Death or Disability
        after the sixth month anniversary of the date of this offer letter but prior
        to
        the two year anniversary of the date of this offer letter, you will be entitled
        pro rata vesting on the Restricted Stock Grant based on the number of Systems
        sold (if prior to the first year anniversary of this offer letter) or on
        the
        income of the sale of the Systems (if after the first year anniversary of
        this
        offer letter but prior to the second year anniversary of the date of this
        offer
        letter).

       

    

    (c) 
In
      the event
      of your Involuntary Termination or Termination without Cause prior to the one
      year anniversary of the date of this offer letter, you will be entitled to
      the
      First Milestone Vesting.

     

    (d) 
In
      the event
      of your Involuntary Termination or Termination without Cause after the one
      year
      anniversary of the date of this offer letter but prior to the second year
      anniversary of the date of this offer letter, you will be entitled to the Second
      Milestone Vesting.

     

    (e) 
In
      the event
      of your Involuntary Termination or Termination without Cause, you will be
      entitled to fifty percent (50%) of the Base Salary.

    

    10.
      Non-Competition Agreement.  You will need to sign
      that certain Non-Competition Agreement attached hereto as Exhibit A (the
“Non-Competition Agreement”), as a condition of your
      employment.  

     

    11. 
      Withholding Taxes.  All forms of compensation
      referred to in this offer letter are subject to reduction to reflect applicable
      withholding and payroll taxes and other deductions required by law.

     

    12. 
      Costs And Attorneys’ Fees.  In the event that
      any action, suit or other proceeding is instituted concerning or arising out
      of
      this offer letter, the prevailing party shall recover all of such party’s costs
      and attorneys’ fees incurred in each such action, suit or other proceeding,
      including any and all appeals or petitions therefrom.

     

    13. 
      Entire Agreement.  This offer letter and the
      Non-Competition Agreement supersede and replace any prior agreements,
      representations or understandings, whether written, oral or implied, between
      you
      and the Company; provided, that, that certain Asset Purchase
      Agreement dated of even date herewith, by and among the Company, Siafu Software,
      LLC and yourself, shall remain in full force and effect. 

     

    [Remainder
      of Page Intentionally Left Blank]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    We
      hope
      that you will accept our offer to join the Company.  You may indicate
      your agreement with these terms and accept this offer by signing and dating
      both
      the enclosed duplicate original of this offer letter and the enclosed Employee
      Invention Assignment and Confidentiality Agreement and returning them to
      me.  As required by law, your employment with the Company is
      contingent upon your providing legal proof of your identity and authorization
      to
      work in the United States.

     

    To
      indicate your acceptance of this offer, please sign and date this offer letter
      and return it to me.  This offer will expire on July 27,
      2007.

    

     

    Very
      truly yours,

     

    

     

    Albert
      E.
      Sisto

    Chairman
      and Chief Exeuctive Officer

     

    I
      have
      read and accept this employment offer:

    
 

    
      
        	 	 	 	 
	
                Signature

              	 	 	 
	 	 	 	 
	
                Name:

              	 	
                John
                  Matze

              	 
	 	 	 	 
	
                Dated:

              	 	 	 
	 	 	 	 
	
                Start
                  Date:

              	 	 July    ,
                2007	 

      

    [Signature
      Page to Employee Offer
      Letter]exhibit10-1.htm

     

    
      

      

    

    Exhibit
      10.1

     

     

    Description
      of Prudential Savings Bank's 2007 Bonus Program

     

        For
      fiscal
      2007, the Compensation Committee of the Board of Directors of Prudential Savings
      Bank (the "Bank") established a bonus pool of $220,000 based on approximately
      6.5% of the Company's net income for the fiscal year.  The bonus pool
      was reduced by $1,250 paid to part-time employees.  All full time
      employees of the Bank are allocated a service factor based on their years of
      service as follows:

     

    
      	
              Service
                Factor

            	 	
              Years
                of Service

            
	 	
              0.5

            	 	
              Up
                To 1 Year

            
	 	
              1.0

            	 	
              1
                To 3 Years

            
	 	
              1.5

            	 	
              Over
                3 To 5 Years

            
	 	
              2.0

            	 	
              Over
                5 To 10 Years

            
	 	
              2.5

            	 	
              Over
                10 To 20 Years

            
	 	
              3.0

            	 	
              Over
                20 Years

            

    

     

        Messrs.
      Thomas Vento, President and Chief Executive Officer, and Joseph Corrato,
      Executive Vice President and Chief Financial Officer, have a fixed service
      factor of 4.0.  Each individual's service factor is then multiplied by
      the employee's base salary to determine the proportionate allocation of the
      bonus pool among all full time employees.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]