Brian Hoffman, et al. v. AuthenTec, Inc., et al. 08-CV ...securities.stanford.edu/filings-documents/1041/...Case 6:08-cv-01741-JA-DAB Document 42 Filed 01/16/09 Page 2 of 16 PageID

Case 6:08-cv-01741-JA-DAB Document 42 Filed 01/16/09 Page 1 of 16 PageID 900

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA

CASE NO. 6:08-cv-1741

BRIAN HOFFMAN, Individually And On Behalf of All Others Similarly Situated,

CLASS ACTION Plaintiffs,

vs.

AUTHENTEC, INC., F. SCOTT MOODY, and GARY LARSEN,

Defendants.

MOTION FOR A PROTECTIVE ORDER PROHIBITING USE OF MISAPPROPRIATED E-MAILS AND REQUEST FOR A HEARING

Defendants AuthenTec, Inc., F. Scott Moody, and Gary Larsen respectfully move this

Court for the entry of a protective order prohibiting the Plaintiff from using AuthenTec's internal

confidential e-mails or any information obtained from them and state as follows:

I. INTRODUCTION

The Plaintiff cannot use in this action the internal confidential e-mails he surreptitiously

obtained from a yet undetermined source. These e-mails contain AuthenTec's confidential

proprietary information and should not have been accessed by the Plaintiff, his counsel, or any

third-party. 1

In the Amended Complaint, the Plaintiff quotes and references a series of

misappropriated e-mails generated by AuthenTec’s technical team in a confidential

troubleshooting operation. These e-mails involved AuthenTec employees exclusively and were

1 Plaintiff's counsel has indicated that the Plaintiff is also in possession of more than a

"box" of documents belonging to AuthenTec. While these documents are not directly referenced

in the Amended Complaint, the Plaintiff should be barred from using all misappropriated

documents in this action.

{M2768995;1}


intended to remain confidential at all times. Indeed, all of the participants in these e-mails were

bound by confidentiality agreements prohibiting the disclosure of any of this information to

third-parties.

It is not clear how the Plaintiff was able to obtain these e-mails. But the strict security

measures that AuthenTec uses to protect the confidentiality of its network and internal e-mails

eliminate any possibility that these e-mails were obtained through proper or innocent means. In

his Amended Complaint, the Plaintiff indicates that he has been in contact with a former

AuthenTec software manager "who reported to the Director of Software Engineering, David

Smith." Yet, Vince Alvarez, the only AuthenTec software manager who reported to Mr. Smith

at the relevant time and the author or recipient of most of the e-mails in question, has signed a

declaration stating under oath that he has not provided any "information documents, emails,

statements, or other assistance to the plaintiff, his attorneys, investigators, or any others working

with the plaintiff or his attorneys" in this matter. Moreover, any such disclosure by Mr. Alvarez

would be improper, as he has signed a Non-disclosure Agreement prohibiting him from doing so.

The Court should not let the integrity of this action be tainted with misappropriated

documents. The Plaintiff has every right to fully investigate his claims and to attempt to comply

with the strict pleading requirements of the PSLRA, 15 U.S.C. §78u-4(b) – which the Amended

Complaint falls far short from satisfying. But the Plaintiff cannot attempt to meet his burden by

making scandalous and unsupported allegations based on misappropriated internal e-mails that

have little bearing, if any, to the alleged claims of securities fraud pled in the initial complaint

filed in this action. 2 Nor can the Plaintiff circumvent the PSLRA's discovery stay and this

2 Indeed, the Plaintiff's reliance on misappropriated e-mails that were not even mentioned

in the initial complaint highlights that this action was initially filed without the required pre-suit

factual investigation.

{M2768995;1} 2


Court's discovery procedures by subversively misappropriating AuthenTec's internal confidential

documents. The Plaintiff's attempt to use AuthenTec's confidential communications in this case

threatens the integrity of this judicial process and makes a mockery of a party's duty to present

his case ethically and with "clean hands."

II. BACKGROUND

A. AuthenTec's Confidential Troubleshooting Procedures

AuthenTec is one of the leading providers of fingerprint authentication sensors and

solutions to the PC, wireless device, and access control markets. AuthenTec primarily sells its

products to original equipment manufacturers, original design manufacturers, or contract

manufacturers.

AuthenTec has invested significant time and resources to develop a confidential

systematic procedure to resolve software bugs in its products. See Dec. of Larry Ciaccia

[attached hereto as Exhibit 1] at ¶ 6-9. This procedure is highly confidential and is part of what

makes AuthenTec a unique company in the industry. See id. Its customers can rely on

AuthenTec's ability to efficiently address any software issues that they may encounter with

AuthenTec sensors.

AuthenTec places a high value on the confidentiality of this information and maintains

strict security measures to prevent unauthorized access to it. See Dec. of Arlene Mostowsky

[attached hereto as Exhibit 2] at ¶ 3. For example, AuthenTec requires all employees and

internal sub-contractors to sign a Non-disclosure Agreement before they can access AuthenTec's

facilities, confidential information, or computer networks. AuthenTec non-disclosure agreements

generally provide:

I recognize that by virtue of my said employment I may acquire confidential

information (in written, or machine readable, or other form) regarding the above

{M2768995;1} 3


matters and other affairs and business of [AuthenTec] and of others, including

trade secrets, proprietary data, and computer programs, of which I hold in trust

and confidence during and following my employment. At no time will I divulge

such confidential information to anyone not entitled thereto nor use same for any

purpose other than for the benefit of [AuthenTec] without prior written consent of

an authorized executive officer or employee of [AuthenTec].

See Attachment 1 to Dec. of Arlene Mostowsky at 5.

The agreements also require employees to recognize that their employment "creates a

relationship of confidence and trust between [the employee] and the company" with respect to

any information:

(a) applicable to the business of the Company; or

(b) applicable to the business of any client or customer of the company, which

may be known to me by the Company or by any client or customer of the

Company, or learned by me during the period of my employment.

See Attachment 1 to Dec. of Arlene Mostowsky at 7.

Similarly, AuthenTec's computer network is password restricted. See Dec. of Arlene

Mostowsky at ¶ 6. AuthenTec employees are prohibited from disclosing their passwords, and

passwords are changed periodically to further enhance the security of the network. See Dec. of

Wayne Sanford [Attached hereto as Exhibit 4] at ¶ 7.

B. Misappropriated E-Mails

Despite AuthenTec's efforts to protect its confidential procedure, the Plaintiff somehow

obtained a series of e-mails generated by AuthenTec's software team in a confidential

troubleshooting operation. These e-mails discuss AuthenTec's confidential procedures to address

software problems, reveal the confidential development status of some of AuthenTec's

proprietary products, and identify specific product tests conducted by AuthenTec. See e.g. ,

Unredacted Am. Compl. at ¶¶ 44, 48, 52; see also Dec. of Larry Ciaccia at ¶¶ 6-9. These e-mails

further specify the number of software bugs encountered, the type of bugs, where they occurred,

{M2768995;1} 4


and how they are addressed. See id. As Larry Ciaccia – AuthenTec's President – explains in his

declaration, "this is highly confidential information that, if disclosed to the public, would provide

AuthenTec's competitors with an unfair advantage." See Dec. of Larry Ciaccia [attached hereto

as Exhibit 1] at ¶ 6. Indeed, these e-mails provide a roadmap for AuthenTec's competitors to

target the identified customers. Competitors would know which customers may be having bug

problems with AuthenTec products, what type of specific problems these customers were having,

how long AuthenTec took to address these problems, how AuthenTec products reacted in

response to certain tests, and what tests AuthenTec conducted in this specific situation. See Dec.

of Larry Ciaccia at ¶ 6-9. Further, competitors would be able to use AuthenTec's confidential

and proprietary information to leverage their competitive positioning with similar products to

AuthenTec's detriment, while investing less resources.

Below, for the Court's convenience, is a chart listing the improperly obtained e-mails

referenced in the Amended Complaint: 3

E-Mail DATE TO/CC'D FROM: AMENDED No. COMPLAINT 1 11/12/2007 AuthenTec software Scott Poole - ¶44(1)(a)

11:27 a.m. engineering team AuthenTec Employee

2 11/15/2007 AuthenTec software Megan ¶44(1)(b) 10:42 p.m. engineering team Greenberg -

AuthenTec Employee

3 11/27/2007 V. Alvarez – AuthenTec Tom ¶19 n.4 2:29 a.m. Employee Tombler -

AuthenTec Employee

3 The senders and recipients of E-mails No. 1 and 2 are not identified in the Amended

Complaint, but AuthenTec has been able to identify them through its internal investigation. See Dec. Wayne Sanford at ¶ ¶ 9-10.

{M2768995;1} 5


4 11/28/2007 AuthenTec software D. Smith – ¶44(1)(b) 9:09 a.m. engineering team Director of

Software Engineering

5 12/4/2007 AuthenTec software Curt ¶ 44(3) 8:31 a.m. engineering team Chandler –

AuthenTec Employee

6 12/4/2007 AuthenTec software D. Smith ¶ 44(4) 11:07 p.m. engineering team

7 12/4/2007 V. Alvarez C. Widmer– ¶ 48 1:28 p.m. AuthenTec

Employee 8 12/11/2007 AuthenTec software V. Alvarez ¶ 48

8:50 a.m. engineering team 9 12/21/2007 Jim Waldron – AuthenTec V. Alvarez ¶ 48

2:38 p.m. Employee 10 2/14/2008 AuthenTec software V. Alvarez ¶ 52

8:22 a.m. engineering team

The information contained in these e-mails permeates the entire Amended Complaint,

and indeed, is the basis of the Plaintiff's recently concocted claims.

C. AuthenTec's Investigation

As soon as the Plaintiff's counsel advised AuthenTec that the Plaintiff had a number of

AuthenTec confidential e-mails, undersigned counsel advised Plaintiff's counsel that the

information was confidential and demanded their return, which Plaintiff's counsel refused.

AuthenTec then launched a thorough investigation to determine how the Plaintiff had

misappropriated AuthenTec e-mails. See Dec. Wayne Sanford [Attached hereto as Exhibit 4] at

¶ 9. AuthenTec was able to determine that the only former AuthenTec employee fitting the

Amended Complaint's description of Confidential Witness No. 1 ("CWI") was Vince Alvarez.

See Dec. of Arlene Mostowsky at ¶ 9. Consistent with its policy to protect its confidential

information, AuthenTec had required Mr. Alvarez to sign a Non-Disclosure Agreement with

{M2768995;1} 6


AuthenTec, in which Mr. Alvarez agreed not to disclose AuthenTec's confidential and

proprietary information to third-parties. As such, even if Mr. Alvarez had disclosed the

information, he would have done so in violation of his Non-disclosure Agreement.

Mr. Alvarez, however, swore under oath, that he did not provide the subject confidential

internal e-mails to Plaintiff. Upon receiving notice from Plaintiff's counsel on the evening of the

filing of the Amended Complaint, AuthenTec acted quickly to determine whether Mr. Alvarez

had violated his Non-disclosure Agreement. On January 12, 2009, AuthenTec contacted Mr.

Alvarez, and after independently reviewing the Amended Complaint, Mr. Alvarez executed a

declaration, stating under oath that he did not provide any information, documents, e-mails,

statements or other assistance to Plaintiff or Plaintiff's counsel. See Dec. of Vince Alvarez

[attached hereto as Exhibit 3].

As of this date AuthenTec has not been able to determine whether there has been any

unauthorized access to AuthenTec's network or premises, but the investigation is still ongoing.

See Dec. Wayne Sanford at ¶ 10. Based on AuthenTec's investigation to date, it is unlikely that

Plaintiff and/or his counsel obtained AuthenTec's confidential information through proper,

legitimate avenues.

Further, AuthenTec has been able to confirm that the information attributed in the

Amended Complaint to Confidential Witness No. 3 indicating that “Dell was no longer giving

PC business to AuthenTec” was false. Indeed, AuthenTec's sale representative at Dell has

signed a declaration stating that "AuthenTec was a major supplier of fingerprint sensors to Dell

in 2008, and will continue to be a major supplier in 2009." See Dec. of Dave Colwell [attached

hereto as Exhibit 5] at ¶ 4. This further casts doubt on the Plaintiff's assertions.

{M2768995;1} 7


I. ARGUMENT

A. The Court Has The Inherent Power To Prevent The Use Of Misappropriated

Documents.

The Plaintiff should not be allowed to taint the integrity of this judicial proceeding with

internal confidential e-mails surreptitiously obtained. Federal courts have the inherent equitable

powers of courts of law over their own process, to prevent abuses, oppression, and injustices. See

Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991); Martin v. Automobili Lamborghini Exclusive,

Inc. , 307 F.3d 1332, 1335 (11th Cir. 2002). These inherent powers extent to a full range of

litigation abuses” and “must continue to exist to fill in the interstices.” Chambers, 501 U.S. at 44.

Pursuant to these inherent powers, a court has the authority to sanction a party that seeks

to introduce improperly obtained evidence. "Otherwise the court, by allowing the wrongdoer to

utilize the information in the litigation before it, becomes complicit in the misconduct." See

Fayemi v. Hambrecht and Quist, Inc. , 174 F.R.D. 319, 324 (S.D.N.Y. 1997). As the court

explained in C.P. Smith Armor Pharmaceutical Co. , 838 F.Supp. 1573, 1578 (S.D.Fla. 1993),

this power extends with equal force to documents obtained outside of the litigation process,

"suppose a plaintiff burglarized a defendant's premises and secured privileged documents. Could

one seriously contend that a court could not prohibit the use of those documents in the

proceeding pending before it simply because the documents were not obtained through the

court's discovery process?"

While it is not yet clear whether the facts of this case track the Smith burglary

hypothetical, it is beyond dispute that the Plaintiff has authorized access AuthenTec's internal

confidential communications. As explained in AuthenTec's emergency motion to temporarily

seal the Amended Complaint, which this Court has granted [D.E. 37], the e-mails reflected in the

Amended Complaint are extremely confidential. These e-mails reveal portions of AuthenTec's

{M2768995;1} 8


systematic procedures to address software bugs and confidential information about AuthenTec

products and customers. These e-mails were never intended to be accessed by or disclosed to

third-parties, much less by the Plaintiff.

B. The Plaintiff Cannot Use AuthenTec's Proprietary Confidential E-Mails,

Irrespective Of How He Obtained These E-Mails.

AuthenTec has not been able to determine how the Plaintiff obtained access to its internal

confidential e-mails, and despite AuthenTec's counsel request, the Plaintiff has refused to

identify the source of these documents. What is clear, however, is that the Plaintiff could not

have obtained the confidential e-mails by legitimate means. At this juncture, AuthenTec can

only surmise that the documents were obtained by hacking into AuthenTec's computer system or

from a current or former AuthenTec employee, who is subject to confidentiality restrictions.

Under any of these circumstances, the Plaintiff should not be allowed to use these documents in

this action.

Federal courts have unequivocally held that a party cannot use in litigation confidential

documents misappropriated by his opponent's former or current employees – or any third party.

In Lahr v. Fulbright & Jaworski, L.L.P. , 1995 WL 17816334, *4 (N.D.Tex. Oct. 25, 1995), the

court made clear that documents misappropriated by a company's former employee cannot be

used by a party in litigation against the company. 4 The company in Lahr was being sued for

4 This is not a situation where a company's former or current employee provides

incriminating documents to a government agency investigating the company. See 18 U.S.C.A. §

1514A(a)(1) (affording whistleblower protections to employees reporting fraudulent information

to governmental enforcement agencies, members of Congress, or the employee's supervisors).

Here, the documents do not show any improper, let alone, fraudulent activity, and were turned

over to a private plaintiff, not to a government agency. S ee Roxberry v. Robertson and Penn, Inc., 1992 WL 102551, *3 (10 th Cir. 192) (party who turned over document to private individual

was not whistleblower for purposes of statutory protections). Further, the whistleblower

protections were intended to promote the voluntary disclosure of incriminating information to the

{M2768995;1} 9


gender discrimination. The plaintiff’s counsel obtained and attempted to use various

embarrassing documents that had been misappropriated by a former employee of the defendant

unrelated to the lawsuit. The court prohibited the plaintiff from using these documents because

the use of these misappropriated documents posed "a threat to the integrity of this judicial

proceeding and the administration of justice." See Lahr, 1995 WL 17816334, *4. The court

reasoned that “to permit the utilization of these [documents] for any purpose in this case would

reward malfeasant conduct and encourage the use of the subversive tactics employed to obtain

the notes. Moreover, permitting the use of [the documents] would unfairly disadvantage the

defendant and counsel who have been following proper procedures and rules of

professionalism." See id. .

The court in In re Shell Oil Refinery , 143 F.R.D. 105, 108-109, (E.D.La 1992) reached

the same conclusion in a case where the plaintiffs had obtained certain allegedly incriminating

documents from an undisclosed current employee. The plaintiffs argued that the documents

could be used in litigation because they had been obtained from a non-managerial employee who

had voluntarily approached plaintiffs' counsel. But the court rejected this argument, holding that

the problem was not that the plaintiffs had communicated with an employee of the defendant, but

that the plaintiffs had "surreptitiously obtained from this employee proprietary documents

belonging to [the defendant]." The court concluded that the plaintiffs' "receipt of [the

defendant's] proprietary documents in this manner was inappropriate and contrary to fair play."

See 143 F.R.D. at 108.

As Lahr and Shell Oil make clear, a party cannot use the misappropriated confidential

documents of his opponent, irrespective of the source of these documents. Indeed, federal courts

government, not the use in a lawyer-driven civil lawsuit of misappropriated confidential

documents generated in a troubleshooting operation.

{M2768995;1} 10


have not hesitated to preclude the use of misappropriated document even where the party who

has the documents refuses to identify its illegitimate sources. See e.g, Giardina v. Ruth U.

Fertel, Inc. , 2001 WL 1628597, *3 (E.D.La. Dec. 17, 2001) (prohibiting plaintiff from using

misappropriated opponent's document although plaintiff refused to identify source of

documents).

The Plaintiff had no right to access AuthenTec's confidential internal communications.

Regardless of how he was able to obtain AuthenTec's internal e-mails, he and/or his counsel

should have immediately returned them to AuthenTec. Instead, the Plaintiff seeks to exploit

these e-mails, quote them out of context, and use them as purported factual support for his

frivolous claims. This improper litigation strategy should not be condoned, and the Plaintiff and

his counsel should be prohibited from using AuthenTec's confidential internal e-mails or any

information obtained from them.

C. Preclusion Is Warranted Even if These E-mails Would Have Been Discoverable.

The Plaintiff cannot justify the use of AuthenTec's confidential communications on the

presumption that he would be able to obtain this information through discovery. Federal courts

have prohibited the use of misappropriated evidence even where the documents would have been

obtained through discovery. See Pure Power Boot Camp v. Warrior Fitness Boat Camp , 2008

WL 4866165 (S.D.N.Y. Oct. 23, 2008); Shell Oil , 143 F.R.D. at 108. In Pure Power, for

example, the plaintiff’s claims were primarily based on a number of personal e-mails that the

plaintiff had taken from the defendant’s personal e-mail account. The court held that the plaintiff

could not use these illegally obtained e-mails. The court reasoned that the integrity of the

judicial process is threatened “by admitting evidence wrongfully, if not unlawfully, secured.”

The court recognized that the plaintiff could have obtained most of these e-mails in discovery,

{M2768995;1} 11


but it noted that this weighed against the admission of the evidence because the plaintiff had

wrongfully “by-passed” the proper rules of discovery. See 2008 WL at 4866165 at *19.

Similarly, in Shell Oil, the court reasoned that the receipt by the plaintiffs of defendant's internal

documents "was more than informal fact-gathering ... [the plaintiffs have] effectively

circumvented the discovery process and prevented [the defendant] from being able to argue

against production." See 143 F.R.D. at 108.

Preclusion is more appropriate here than in Pure Power and Shell Oil because the

misappropriation of AuthenTec's confidential internal documents has allowed the Plaintiff to

circumvent not only the discovery procedures but also the PSLRA's discovery stay. Under the

PSLRA, the Plaintiff is not entitled to seek discovery until the resolution of any motion to

dismiss. See 15 U.S.C. § 78u-4(b)(3)(B). Yet, here the Plaintiff has turned the PSLRA on its

head and obtained AuthenTec's confidential internal communications even before filing the

operative complaint. The Plaintiff's misappropriation of AuthenTec's internal confidential

documents is more than "fact gathering." The Plaintiff has in effect circumvented this Court's

discovery procedures and the PSLRA's restrictions. To allow the use of AuthenTec's e-mails in

this case would reward these subversive tactics and would force AuthenTec to address

incendiary false allegations that cause AuthenTec severe competitive harm, which the Plaintiff

would not have made had he not obtained AuthenTec's confidential e-mails.

IV. CONCLUSION

For the foregoing reasons, the Court should enter a protective order prohibiting the

Plaintiff from using, publishing, or disseminating AuthenTec's internal confidential e-mails or

any information obtained therefrom, ordering the Plaintiff to immediately return all original and

{M2768995;1} 12


copes of the e-mails to AuthenTec, and directing the Plaintiff to identify the source of

AuthenTec's internal e-mails.

AuthenTec also requests that all references to improperly obtained AuthenTec's internal

communications be stricken from the Amended Complaint.

AuthenTec reserves the right to seek the disqualification of Plaintiff's counsel or any

other appropriate relief, depending on what is learned about how the Plaintiff obtained

AuthenTec's internal confidential communications.

V. REQUEST FOR A HEARING

Pursuant to Local Rule 3.01(j), the Defendants respectfully request a hearing on the

Defendants' emergency motion to temporarily seal the Amended Complaint. A hearing will

assist this Court in deciding this motion as the Court would be able review the e-mails in

question in camera.

VI. CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 3.01(g)

Undersigned counsel has consulted with counsel for Plaintiff in a good faith effort to

resolve the issues addressed in this motion, and has been unable to do so.

{M2768995;1} 13


Respectfully submitted,

AKERMAN SENTERFITT CNL II Tower 420 South Orange Avenue – 12 th Floor Orlando, Florida 32801 Telephone: (407) 423-4000 Facsimile: (407) 843-6610

SunTrust International Center

One S.E. Third Avenue – 25th Floor Miami, Florida 33131-1704 Telephone: (305) 374-5600 Facsimile: (305) 374-5095

By: /s/ Francisco A. Rodriguez__________

Virginia B. Townes, Esq. Florida Bar No. 361879 [email protected] Brian P. Miller, Esq. Florida Bar No. 0980633 [email protected] Michael Marsh, Esq. Florida Bar No. 0072796 [email protected] Francisco A. Rodriguez, Esq. Florida Bar No. 0653446 [email protected]

Counsel for Defendants AuthenTec, Inc.,

F. Scott Moody, and Gary Larsen

{M2768995;1} 14


CERTIFICATE OF SERVICE

I hereby certify that on January 16, 2009, I electronically filed the foregoing document

with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being

served this day on all counsel of record identified on the attached Service List in the manner

specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in

some other authorized manner for those counsel or parties who are not authorized to receive

electronically Notices of Electronic Filing.

/s/ Francisco A. Rodriguez_________

{M2768995;1} 15


SERVICE LIST

Brian Hoffman, et al. v. Authentec, Inc., et al., Case No. 6:08-cv-1741-Orl-28KRS

United States District Court, Middle District of Florida

Counsel for Plaintiffs (service by CM/ECF)

Lionel Z. Glancy, Esq. Michael Goldberg, Esq. GLANCY BINKOW & GOLDBERG LLP 1801 Avenue of the Stars, Suite 311 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 E-mail:

Howard G. Smith, Esq. LAW OFFICES OF HOWARD G. SMITH 3070 Bristol Pike, Suite 112 Bensalem, PA 19020 Telephone: (215) 638-4847 Facsimile: (215) 638-4867 E-mail:

Counsel for Defendants (service by CM/ECF)

Virginia B. Townes, Esq. Florida Bar No. 361879 Brian P. Miller, Esq. Florida Bar No. 0980633 Michael Marsh, Esq. Florida Bar No. 0072796 Francisco A. Rodriguez, Esq. Florida Bar No. 0653446 AKERMAN SENTERFITT One S.E. 3rd Avenue, 25th Floor Miami, FL 33131-1714 Telephone: (305) 374-5600 Facsimile: (305) 374-5095 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected]

{M2768995;1} 16

Case 6:08-cv-01741-JA-DAB Document 42-2 Filed 01/16/09 Page 1 of 4 PageID 916

EXHIBIT 1



CASE NO. 6:08-cv-1741-JA-DAB


Plaintiffs, CLASS ACTION

VS.


Defendants.

DECLARATION OF LARRY CIACCIA

1, LARRY CIACCIA, state that the following facts are true and correct:

1. I am employed at AuthenTec, Inc. ("AuthenTec") as the President and have

personal knowledge of the facts set forth in this declaration.

2. In my role with AuthenTec, I am responsible for marketing and sales of

AuthenTec products.

3. I was provided amended complaint in the above-captioned case by Frederick

Jorgenson, Vice President & General Counsel at AuthenTec.

4. AuthenTec places high value on its confidential, proprietary, and trade secret

information. Therefore, AuthenTec controls physical access to its physical facilities, computer

networks, and its data.

5. It appears to me that the internal AuthenTec information referred to in the

amended complaint is proprietary, confidential, and/or trade secret information of AuthenTec.

6. The amended complaint reflects a series of emails that discuss AuthenTec's

approach to handling software errors (or "bugs"), It reveals portions of a systematic procedure

that is confidential to AuthenTec. The number of bugs, type of bugs, where they occur, and how

they are addressed is highly confidential information as well as competition sensitive. For


Declaration of Larry Ciaccia January 14, 2009 Page No.2 of 3

example, Paragraph 44 of the amended complaint, and the emails referenced in that paragraph,

discuss the interaction between bugs, testing and some potential consequences of the bugs (as

well as how AuthenTec responds in such a situation). This is highly confidential that, if

disclosed to the public, would provide AuthenTec's competitors with an unfair advantage. In

addition, the statements in the amended complaint regarding the response time to handling

particular bugs, a customer's response to bugs, or a customer's level of concern with particular

bugs are extremely confidential and can have a material adverse effect on the competitive

position of a party (such as AuthenTec), if publicly known.

In Paragraph 43, AuthenTec is cast in a bad light in view of a confidential email

that identifies bugs with a particular customer, in favor of a particular competitor. This would

invite the identified competitor to use the amended complaint as an unfair marketing tool.

Similarly, Paragraph 48 identifies the number of bugs with two different

customers at two different dates, as well as some of the individuals within AuthenTec that

addressed these issues. Likewise, information related to a sensors "detection rate" and how

sensors react in response to multiple scans and their false acceptance rate (the rate a sensor

"accepts" an individual that should be rejected) is highly proprietary and confidential. Further,

to suggest that customers were given software that was "not ready" or that software did not meet

specifications is particularly incendiary (this is also true of Paragraph 20).

Paragraph 52, quotes from an internal email that is certainly a confidential

communication regarding the repair of bugs with a particular customer intended solely for

AuthenTec personnel.

10. The fingerprint sensor business for computer notebooks and laptops is highly

competitive with only a handful of genuine competitors.

11. In the PC market, the vast majority of fingerprint sensor volume purchases are

made by the top ten computer manufacturers (and their contract manufacturers), which includes

ACER, ASUSTek, Dell, Fujitsu, HP, Lenovo, and Toshiba, among others.

12. If embarrassing confidential or proprietary information was available via a public

court filing, then I would expect that it would be used by one competitor against another in the

pursuit of fingerprint sensor sales. For example, footnote 4 suggests that AuthenTec places more


Declaration of Larry Ciaccia January 14, 2009 Page No, 3 of 3

value on a certain customer over another and this information can be used negatively in winning

business from AuthenTec. Two AuthenTec customers are identified in footnote 4. In addition,

the inaccurate market data in Paragraphs 21 and 23 could easily be used as a negative sales tool

against AuthenTec.

13. in the cell phone market, the vast majority of fingerprint sensor volume purchases

are made by a handful of manufacturers (and their contract manufacturers).

14. The Motorola mobile phone that Atrua "won" in 2007 has not resulted in a

commercial phone with a fingerprint sensor offered for sale by a mobile carrier; therefore it

represents no market share loss for AuthenTec or market share gain for Atrua.

15. Concord Sales Inc. which undertakes business in the name of Concord Marketing

International ("Concord") is the sole outside sales representative for AuthenTec, Inc.

("AuthenTec") at Dell Inc. ("Dell"). Dave Colwell of Concord is the primary representative on

behalf of AuthenTec at Dell.

16. In paragraph 21, the amended complaint in the above referenced matter identifies

a confidential witness ("CW3") as an outside sales representative, and goes on to state that "Dell

was no longer giving PC business to AuthenTec."

17. AuthenTec was a major supplier of fingerprint sensors to Dell in 2008, and will

continue to be a major supplier in 2009.

18. I do not know how the plaintiff or his attorneys obtained the information referred

to in the amended complaint.

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on Jai


EXHIBIT 2




BRIAN HOFFMAN, Individually And On Behalf

of All Others Similarly Situated,


VS.


Defendants.

DECLARATION OF ARLENE MOSTOWSKI

I, ARLENE MOSTOWSKI, state that the following facts are true and correct:

1. I am employed at AuthenTec, Inc. ("AuthenTec") as the Vice President of Human

Resources (known internally as "Player Development") and have personal knowledge of the

facts set forth in this declaration.

2. In my role with AuthenTec, I am very familiar with our organizational and

management structure.


information. Among other things, AuthenTec requires all employees and internal subcontractors

to sign a Non-Disclosure Agreement ("Employee NDAs") prior to being granted access to

AuthenTec's facilities, confidential information, or computer networks. The various versions of

Employee NDAs are attached as Attachment 1.

4. AuthenTec restricts physical access to its facilities by fingerprint enabled security

or a lock and key at every door.

5. All AuthenTec data stored in or transmitted on any computer or communication

system within the corporate network is either proprietary, confidential, or a trade secret of

AuthenTec. It is the policy of the company to protect information in accordance with the


Declaration of Arlene Mostowski January 13, 2009 Page No. 2

competitive and contractual value of the information, the cost of reconstructing the information

and the need to preserve the company's rights and remedies in the event of disclosure or loss.

6. The AuthenTec information technology staff only allows access to the AuthenTec

network to those individuals who have signed an Employee NDA. An individual who accesses

the corporate network must follow a password policy that is used to limit access to the corporate

network to specifically authorized individuals.

On January 10, 2009, I was provided the redacted amended complaint in the

above-captioned case by Frederick Jorgenson, Vice President & General Counsel at AuthenTec.

8. Paragraph 18 of the amended complaint refers to a "former software manager"

employed through the class period as Confidential Witness No. 1 ("CW1") who "reported to the

Director of Software Engineering, David Smith."

While there has not been a position titled "software manager" at AuthenTec,

Vince Alvarez is the only person formerly employed with AuthenTec who acted as a "software

manager" during the class period and who reported to David Smith.

10. I believe the amended complaint can only be referring to Vince Alvarez as CW1.

11. It appears to me that the information referred to in the amended complaint is

proprietary, confidential, and/or trade secret information of AuthenTec.

12. I do not know how the plaintiff or his attorneys obtained the information referred



foregoing is true and correct. Executed on January 13, 2009.

ai Arlene Mostowski


ATTACHMENT 1


4uthenTec, Inc Employee's Name ( please print or type)

EMPLOYEE AGREEMENT

As one of the conditions of my employment or continuance of my employment by AuthenTec, Inc or any division or subsidiary thereof (said corporation and any division or subsidiary thereof by which I may be employed from time to time being hereinafter called the Employer), I hereby agree with the Employer as follows:

(1) All inventions (whether patentable or unpatentable), improvements, discoveries and creations (including computer programs), and all copyrights therein, which during the period of my employment by the Employer I shall make or conceive alone or in conjunction with others (a) while engaged in any work for the Employer or use of facilities or materials of the Employer, or (b) which relate to any product, process, development or research work, or any other business of the Employer, and all records relating thereto (in written or machine readable, or other form), shall be the property of the Employer, and I will promptly and fully disclose the same (in writing if requested) to the Employer, its proper executives and designated representatives, but to no others, and will deliver to the Employer all such reports.

(2) Further, on request of the Employer at any time I will without charge but at the Employer's expense execute and deliver applications for patents, copyright registrations and mask works in the United States or in any foreign countries on such inventions, improvements, discoveries and creations, together with assignments to the Employer of my entire interest therein, and I will give to the Employer such reasonable assistance as may be requested of me in securing, enforcing and protecting said applications, patents, unpublished copyrights, copyright registrations, and mask works. Such services after termination of my employment are to be rendered by me on the basis that I will be paid a reasonable per diem compens'ation by the Employer for time devoted to such services and that the Employer will reimburse me for expenses necessarily incurred in connection therewith.

(3) I recognize that by virtue of my said employment I may acquire confidential information (in written, or machine readable, or other form) regarding the above matters and other affairs and business of the Employer and of others, including trade secrets, proprietary data, and computer programs, all of which I hold in trust and confidence during and following my employment. At no time will I divulge such confidential information to anyone not entitled thereto nor use same for any purpose other than for the benefit of the Employer without the prior written consent of an authorized executive officer or employee of the Employer. Upon leaving such employment I will not take with me any drawings, blueprints, documents, computer programs, compilations of technical data, specifications or other records of any nature (in written machine readable, or other form) belonging to the employer or others, or any reproductions thereof.

(4) I further recognize that by virtue of my employment I may have access to computer programs and technology that have been provided or licensed to the Employer on a restricted basis. I agree to comply with such restrictions.

Witness Employee Signature Date

INSTRUCTIONS After reading this Agreement, the employee should sign two copies in the presence of a human resources representative who will sign both as a witness. When signed, one original copy is to be given to the employee and the other original copy is placed in the employee's personnel folder. If any questions arise as to interpretation, they should be brought to the attention of the Contracts Manager.


JiuthenTec, Inc Employee's Name (please print or type)

Conflict of Interest and Outside Activities Policy and Report

Policy All employees are expected to act in the best interest of AuthenTec, Inc. and to provide a full measure

of working time and attention to assigned duties. In addition, management and professional personnel at the director level or above are employed and compensated on the basis that their full business and technical abilities are to be devoted to the activities of AuthenTec, Inc. and they will not have outside business interests that require management or professional time or effort, except as required to manage personal investment programs. Exempt professional employees are not to practice their professions for compensation from non-AuthenTec sources, except for employment with non-profit entities with written approval of the Contracts Manager.

Administrative Guides As a condition of employment, all employees are expected to avoid , directly or indirectly:

(1) Employment or other business connection with or investment in competitors, suppliers, or customers, except for investments in large, publicly-traded companies: and

(2) Outside activities that interfere with the performance of their duties.

Subject to availability of time and consistent with good industry practice, employees are encouraged to engage in professional societies and associations and in civic and similar voluntary activities as appropriate and in accordance with individual and company interests.

As a condition of continued employment, all employees are to sign this Conflict of Interest and Outside Activities Report at the time of employment and annually thereafter. Each year thereafter those same employees are to sign the form again and promptly when the circumstances have changed from the previous report. Employees are to discuss any possible conflict of interest with the Contracts Manager and to take prompt corrective action to eliminate a conflict if it exists.

Report I have no financial interest in, nor am I engaged in, any activity that is , or may be, contrary to this conflict of interest and outside activities policy except as follows (IF THERE ARE NO EXCEPTONS, WRITE "NONE"):

Notes: In the event you have any reasonable doubt as to the conformity of your present financial interests or activities with this policy, you should report the same for clearance of record purposes.

If at any time hereafter there is a change in circumstances that would affect a report you previously filed, you should, you should at that time file a revised report.

Date Employee's Signature


EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement between( and AuthenTec, Inc., a Delaware corporation (the " Company"), which is a material part of the consideration for my employment by the Company:

As an employee of AuthenTec:

I recognize that the Company is engaged in a continuous program of research, development and production respecting its business, present and future, including fields generally related to its business, and that the Company possesses, will possess, and will continue to possess information that has been created, discovered, developed or otherwise become known to the Company (including without limitation, information created by, discovered or developed by, or made known to, me during the period arising out of my employment by the Company) and/or in which property rights have been or will be assigned or otherwise conveyed to the Company, which information has and will have commercial value in the business in which the Company is engaged. All of the aforementioned information is hereinafter referred to as "Proprietary Information". By way of illustration, but not limitation, Proprietary Information includes trade secrets (for purposes of this Agreement such term shall be deemed to include the definition of "trade secret" as defined under Section 688.002 of the Florida Uniform Trade Secrets Act), processes, formulae, data, software programs, improvements, inventions, techniques, marketing plans, strategies, forecasts, computer programs, coyrightable material and customer lists.

2. I understand that my employment creates a relationship of confidence and trust between me and the Company with respect to any information:

a.) applicable to the business of the Company; or b.) Applicable to the business of any client or customer of the

Company, which may be made known to me by the Company or by any client or customer of the Company, or learned by me during the period of my employment.

I agree and acknowledge that the enforcement of this Agreement is necessary to ensure the preservation, protection and continuity of this business, competitive advantage and goodwill of the Company. I acknowledge that the products and services to be sold and rendered by the Company are unique in character and are of particular significance to the Company, and that the Company is in a competitive business. In consideration of my employment by the Company and the compensation


received by me from the Company from time to time I further hereby agree as

follows: a.) All Proprietary Information shall be the sole property of the

Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information. At all times, both during my employment by the Company and after its termination by the Company or by me for any reason, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything relating to it without the written consent of the Company, except as may be necessary in the ordinary course or performing my duties for the Company.

b.) All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with my employment shall be and remain the sole property of the Company and shall be returned to it immediately as and when requested by the Company.

c.) I will promptly disclose to the Company, or any persons designated by it, all company; improvements, inventions, formulae, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the term of my employment (all such improvements, inventions, formulas, ideas, processes, techniques, know-how and data are hereinafter collectively referred to as

"Inventions"). d.) I agree that all Inventions which I develop or have developed

(in whole or in part, either alone or jointly with others) and (i) which use or have used equipment, supplies, facilities or Proprietary Information of the Company, or (ii) which use or have used the hours for which I am to be or was compensated by the Company, or (iii) which relate to the business of the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company, shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights, and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such Inventions and improvements to assist the Company in every proper way (but at the Company's expense) to obtain and from time to time enforce patents,


copyrights or other rights on said Inventions in any and all countries, and to that end I will execute all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such Inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company's request on such assistance. If after making reasonable efforts the Company is unable to secure my signature to any lawful and necessary document required to apply for or execute my patent, copyright or other applications with respect to such Inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents, as my agents and attorneys-in-fact to act for and in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me. in the event that the Company executes any document as attorney-in- fact on behalf of me, the Company will take reasonable steps to notify me of such execution as soon as possible after such

execution. e.) As a matter of record I attach hereto as Exhibit A, a complete

list of all inventions or improvements relevant to the subject matter of my employment by the Company which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is attached to this Agreement, I represent that I have no such Inventions and improvements at the time of signing this

Agreement. f.) I represent that my performance of all the terms of this

Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter, any agreement either written or oral in conflict herewith.

g.) I represent that my execution of this Agreement, my employment with the Company and my performance of my

3


proposed duties for the Company in the development of its business will not violate any obligations I may have to any former employer.

4.) I agree that any breach of this Agreement by me will result in irreparable and continuing damage to the Company and that in the event of such breach, the Company shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder.

5.) I understand that this Agreement does not create any obligation on the part of the Company or any other person or entity to continue my employment. My employment relationship with the Company is at will.

6,) I acknowledge that any waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any provision thereof.

7.) I hereby agree that each provision of this Agreement shall be treated as a separate and independent clause, and that the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.

8.) This Agreement shall effective as the first day of my employment by the Company.

9.) This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns. I agree that the Company may transfer all or any part of its right, title and interest in and to this Agreement to any other person (including without limitation a natural person, corporation, partnership, joint venture, association or other legal entity), and such transfer will be immediately effective without notice to me.

Print Name of Employee

Signature Accepted and Agreed to: AuthenTec Inc. By:

J.A. Martin 'I? iretor, Strategic Alliances and Operations

4


EMPOLOYEE PROPRIETARY INFORMATION AuthenTec Inc. AND INVENTIONS AGREEMENT

The following confirms an agreement between (_________ __ _____) and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a material part of the consideration for my employment by the Company:


I recognize that the Company is engaged in a continuous program of research, developmnt and production respecting its business, present and future, including fields generally related to its business, and that the Company possesses, will possess, and will continue to possess information that has been created, discovered, developed or otherwise become known to the Company (including without limitation, information created by, discovered or developed by, or made known to, me during the period arising out of my employment by the Company) and/or in which property rights have been or will be assigned or otherwise conveyed to the Company, which information has and will have commercial value in the business in which the Company is engaged. All of the aforementioned information is hereinafter referred to as "Proprietary Information." By way of illustration, but not limitation, Proprietary Information includes trade secrets (for purposes of this Agreement such term shall be deemed to include the definition of "trade secret" as defined under Section 688.002 of the Florida Uniform Trade Secrets Act), processes, formulae, data, software programs, improvements, inventions, techniques, marketing plans, strategies, forecasts, coni puter programs, copyrightable material and customer lists.

I understand that my employment creates a relationship of confidence and trust between me and the Company with respect to any information:

a. Applicable to the business of the Company; or b. Applicable to the business of any client or customer of the Company, which may be made

known to me by the Company or by any client or customer of the Company, or learned by me during the period of my employment.

I agree and acknowledge that the enforcement of this Agreement is necessary to ensure the preservation, protection and continuity of this business, competitive advantage and goodwill of the Company. I acknowledge that the products and services to be sold and rendered by the Company are unique in character and are of particular significance to the Company, and that the Company is in a competitive business. In consideration of my employment by the Company and the compensation received by me from the Company from time to time I further hereby agree as follows:

a. All Proprietary Information shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information. At all time, both during my employment by the Company and after its termination by the Company or by me for any reason, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything relating to it without the written consent of the Company, except as may be necessary in the ordinary course or performing my duties for the Company.

AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 • Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


Employee Proprietary Information Page 2 of Format 08-16-02 And Inventions Agreement

b. All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with my employment shall be and remain the sole property of the Company and shall be returned to it immediately as and when requested by the Company.

c. I will promptly disclose to the Company, or any persons designated by it, all Company; improvements, inventions, formulae, ideas, processes, techniques, know-how and data whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the term of my employment (all such improvements, inventions, formulas, ideas, processes, techniques, know-how and data are hereinafter collectively referred to as "Inventions").

ci. I agree that all Inventions which I develop or have developed (in whole or in part, either alone or jointly with others) and (i) which use or have used equipment, supplies, facilities or Proprietary Information of the Company, or (ii) which use or have used the hours for which I an-i to be or was compensated by the Company, or (iii) which relate to the business or the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company, shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights, and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such Inventions and improvements to assist the Company in every proper way (but at the Company's expense) to obtain and from time to time enforce patents, copyrights or other rights on said Inventions in any and all countries, and to that end I will execute all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such Inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company's request on such assistance. If after making reasonable efforts the Company is unable to secure my signature to any lawful and necessary documents required to apply for or execute my patent, copyright or other applications with respect to such Inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents, as my agents and attorneys-in-fact to act for any in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me. in the event that the Company executes any document as attorney-in-fact on behalf of me, the Company will take reasonable steps to notify me of such execution as soon as possible after such execution.

e. As a matter of record I attach hereto as Exhibit A, a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is attached to this Agreement, I represent that I have no such Inventions and improvements at the time of signing this Agreement.

f. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or

AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 . Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


Employee Proprietary Information Page 3 of 3 Format 08- 6-02

And Inventions Agreement

in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter, any agreement either written or oral in conflict herewith.

g. I represent that my execution of this Agreement, my employment with the Company and my performance of my proposed duties for the Company in the development of Is

business will not violate any obligations I may have to any former employer.

I agree that any breach of the Agreement by me will result in irreparable and continuing damage to the Company and that in the event of such breach, the Company shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder.

5. I understand that this Agreement does not create any obligation on the part of the Company or any other person or entity to continue my employment. My employment relationship with the Company is at will.

I acknowledge that any waiver by either party of a breach of any provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any provision thereof.

1 hereby agree that each provision of the Agreement shall be treated as a separate and independent clause, and that the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate Judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.

This Agreement shall be effective as of the first day of my employment by the Company.

This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall insure to the benefit of the Company, its successors and assigns. I agree that the Company may transfer all or any part of its right, title and interest in and to this Agreement to any other person (including without limitation a natural person, corporation, partnership, joint venture, association or other legal entity), and such transfer will be immediately effective without notice to me.

Print Name o/Ernioyee -

Siureof Employee

Accepted and Agreed to Autiien]ec, Inc By: -

CFO and VP Human Resources

AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 • Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.autheritec.com


4thenTec x c

EM1OLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement on _/_/_ - between (_____ - _) and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a material part of the consideration for my employment by the Company:


I recognize that the Company is engaged in a continuous program of research, development and production respecting its business, present and future, including fields generally related to its business, and that the Company possesses, will possess, and will continue to possess information that has been created, discovered, developed or otherwise become known to the Company (including without limitation, information created by, discovered or developed by, or made known to, me during the period arising out of my employment by the Company) and/or in which property rights have been or will be assigned or otherwise conveyed to the Company, which information has and will have commercial value in the business in which the Company is engaged. All of the aforementioned information is hereinafter referred to as "Proprietary Information." By way of illustration, but not limitation, Proprietary Information includes trade secrets (for purposes of this Agreement such term shall be deemed to include the definition of "trade secret" as defmed under Section 688.002 of the Florida Uniform Trade Secrets Act), processes, formulae, data, software programs, improvements, inventions, techniques, marketing plans, strategies, forecasts, computer programs, copyrightable material and customer lists.

2. 1 understand that my employment creates a relationship of confidence and trust between me and the Company with respect to any information:


known to me by the Company or by any client or customer of the Company, or learned by inc during the period of my employment.





Employee Proprietary Information Page 2 of 4

Format 05/23/05 And Inventions Agreement


c. I will promptly disclose to the Company, or any persons designated by it, all Company; improvements, inventions, formulae, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the term of my employment (all such improvements, inventions, formulas, ideas, processes, techniques, know-how and data are hereinafter collectively referred to as "Inventions").

d. I agree that all Inventions which I develop or have developed (in whole or in part, either alone or jointly with others) and (i) which use or have used equipment, supplies, facilities or Proprietary Information of the Company, or (ii) which use or have used the hours for which I am to be or was compensated by the Company, or (iii) which relate to the business or the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company, shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights, and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such Inventions and improvements to assist the Company in every proper way (but at the Company's expense) to obtain and from time to time enforce patents, copyrights or other rights on said Inventions in any and all countries, and to that end I will execute all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing the same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such Inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company's request on such assistance. If after making reasonable efforts the Company is unable to secure my signature to any lawful and necessary documents required to apply for or execute my patent, copyright or other applications with respect to such Inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents, as my agents and attorneys-in-fact to act for any in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me. In the event that the Company executes any document as attorney-in-fact on behalf of me, the Company will take reasonable steps to notify me of such execution as soon as possible after such execution.



AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


Employee Proprietary Information Page 3 of 4 Format 05/23/05



g. I represent that my execution of this Agreement, my employment with the Company and my performance of my proposed duties for the Company in the development of its business will not violate any obligations I may have to any former employer.

4. Noncompetition. (a) During my employment with the Company and for twelve (12) months after termination thereof, whether with or without cause, I will not directly or indirectly (i) as an individual proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as the holder of not more than five percent (5%) of the total outstanding stock of a publicly-held company), engage in any business activity that directly competes with the Company, or is based on technology of the kind or type acquired, developed or being developed, produced, marketed, distributed, planned, furnished or sold by the Company while I was employed by the Company; (ii) recruit, solicit or induce, or attempt to induce, any employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company; or (iii) solicit, divert, reduce, take away, or attempt to divert, reduce or take away, the business or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished or sold by the Company) of any of the Company's clients, customers, or accounts, or prospective clients, customers or accounts, that were contacted, solicited or served by me while employed by the Company.

(b) I acknowledge that the covenant in Section 4(a) has a unique, very substantial and immeasurable value to the Company. I acknowledge and agree that the products and services developed by the Company are or are intended to be marketed and licensed to customers worldwide. I further acknowledge and agree to the reasonableness of this covenant not to compete and the reasonableness of the geographic area and duration of time which are a part of said covenant. I also acknowledge and agree that this covenant will not prevent me from becoming gainfully employed, or otherwise earning a livelihood following termination of my employment with the Company.

4. 1 agree that any breach of the Agreement by me will result in irreparable and continuing damage to the Company and that in the event of such breach, the Company shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder.

I understand that this Agreement does not create any obligation on the part of the Company or any other person or entity to continue my employment. My employment relationship with the Company is at will.

I acknowledge that any waiver by either party of a breach of any provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any provision thereof.

7. I hereby agree that each provision of the Agreement shall be treated as a separate and independent clause, and that the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.



Employee Proprietary Infonnation Page 4 of 4 Format 05/23/05


8. This Agreement shall be effective as of the first day of my employment by the Company.

This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall insure to the benefit of the Company, its successors and assigns. I agree that the Company may transfer all or any part of its right, title and interest in and to this Agreement to any other person (including without limitation a natural person, corporation, partnership, joint venture, association or other legal entity), and such transfer will be immediately effective without notice to

me.

Print Name ofiioyee

Signature of Emplyee

Date

Accepted and kgreed to: AuthenThc). By:

Greg li V4iumar 'esources CFO a d



AuthenTec EMPOLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement on II between ( and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a material part of the consideration for my employment by the Company:


I recognize that the Company is engaged in a continuous program of research, development and production respecting its business, present and future, including fields generally related to its business, and that the Company possesses, will possess, and will continue to possess information that has been created, discovered, developed or otherwise become known to the Company (including without limitation, information created by, discovered or developed by, or made known to, me during the period arising out of my employment by the Company) and/or in which property rights have been or will be assigned or otherwise conveyed to the Company, which information has and will have commercial value in the business in which the Company is engaged. All of the aforementioned information is hereinafter referred to as "Proprietary Information." By way of illustration, but not limitation, Proprietary Information includes trade secrets (for purposes of this Agreement such term shall be deemed to include the definition of "trade secret" as defined under Section 688.002 of the Florida Uniform Trade Secrets Act), processes, formulae, data, software programs, improvements, inventions, techniques, marketing plans, strategies, forecasts, computer programs, copyrightable material and customer lists.

2. I understand that my employment creates a relationship of confidence and trust between me and the Company with respect to any information:

a. Applicable to the business of the Company; or h. Applicable to the business of any client or customer of the Company, which may be made






Employee Proprietary Information Page 2 of 4 Format 02-27-06 And Inventions Agreement









Format 02-27-06






5. I agree that any breach of the Agreement by me will result in irreparable and continuing damage to the Company and that in the event of such breach, the Company shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder.


7. I acknowledge that any waiver by either party of a breach of any provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any provision thereof.




Employee Proprietary Information Page 4 of 4 Format 02-27-06



10. This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall insure to the benefit of the Company, its successors and assigns. I agree that the Company may transfer all or any part of its right, title and interest in and to this Agreement to any other person (including without limitation a natural person, corporation, partnership, joint venture, association or other legal entity), and such transfer will be immediately effective without notice to me.


Signature of Employee

Date

Accepted and Agreed to: AuthenTec, Inc.

By: Arlene Mostowski Director, Human Resources



: AuthenTeC C

EMPOLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement on II between ( and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a material part of the consideration for my employment by the Company:


I recognize that the Company is engaged in a continuous program of research, development and production respecting its business, present and future, including fields generally related to its business, and that the Company possesses, will possess, and will continue to possess information that has been created, discovered, developed or otherwise become known to the Company (including without limitation, information created by, discovered or developed by, or made known to, Inc daring the period arising out of my employment by the Company) and/or in which property rights have been or will be assigned or otherwise conveyed to the Company, which information has and will have commercial value in the business in which the Company is engaged. All of the aforementioned information is hereinafter referred to as "Proprietary Information." By way of illustration, but not limitation, Proprietary Information includes trade secrets (for purposes of this Agreement such term shall be deemed to include the definition of "trade secret" as defined under Section 688.002 of the Florida Uniform Trade Secrets Act), processes, formulae, data, software programs, improvements, inventions, techniques, marketing plans, strategies, forecasts, computer programs, copyrightable material and customer lists.

I understand that my employment creates a relationship of confidence and trust between inc and the Company with respect to any information:





AuthcnTcc, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 .Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


Employee Proprietary information Page 2 of 4

Format 02-27-06










Format 02-27-06












Date






Arlene Mostowski Director, Human Resources



(-, P- 9~ etirec EMPOLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement on between C and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a matri d part of the consideration for my employment by the Company:







All Proprietary Information shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information. At all time, both during my employment by the Company and after its termination by the Company or by me for any reason, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything relating to it without the written consent of the Company, except as may be necessary in the ordinary course or performing my duties for the Company.



Employee Proprietary Information Page 2 of 4 Format 08-15-07 And Inventions Agreement


c. I will promptly disclose to the Company, or any persons designated by it, all Company; improvements, inventions, formulae, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the term of my employment (all such improvements, inventions, formulas, ideas, processes, techniques, know-how and data are hereinafter collectively referred to as "inventions").






Employee Proprietary Information Page 3 of Format 08-15-07 And Inventions Agreement





5. 1 agree that any breach of the Agreement by me will result in irreparable and continuing damage to the Company and that in the event of such breach, the Company shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations hereunder.

6. 1 understand that this Agreement does not create any obligation on the part of the Company or any other person or entity to continue my employment. My employment relationship with the Company is at will.



AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 e Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


Employee Proprietary Itifonnation Page 4 o1`4 Format 08-15-07 And Inventions Agreement



V ( /?ZLT Print Nar1W of tmployee

— V~Dq~' Signature of Employee

Date


13y: 4 —4~U4 -



thenTec i *:all I s

EMPOLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following is a complete list of all inventions and improvements relevant to the subject matter of my employment by AutheuTec. Inc. (the "Company") that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment by the Company that I desire to remove from the operation of the attached Proprietary Information and Inventions Agreement.

No Inventions or improvements.

See below: Any and all inventions regarding:

Additional sheets attached.

I propose to bring to my employment the following materials and documents of a former employer:

No materials or documents.

See below:

I agree and acknowledge that I shall not partake in any action while employed by the Company that could be considered an infringement of the intellectual property of others, including but not limited to, former employers and their customers.

I further resolve that I shall not engage in any activity while employed by the Company that could be construed as a use of any former employer's trade secrets or other proprietary information.


vc Signature of mpl- oyee

—to/l & Date

AuthenTec. Inc. • P.0. Box 2719 e Melbourne, FL 32902-2719 Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com


he nTe c EMPOLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms an agreement on /1 between (_____________________ and AuthenTec, Inc., a Delaware corporation (the "Company"), which is a material part of the consideration for my employment by the Company:











Format 12-17-07 And Inventions Agreement

b, All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with my employment shall be and remain the sole property of the Company and shall be returned to it immediately as and when requested by the Company.











Noncompetition. (a) During my employment with the Company and for twelve (12) months after termination thereof; whether with or without cause, I will not directly or indirectly (i) as an individual proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as the holder of not more than five percent (5%) of the total outstanding stock of a publicly-held company), engage in any business activity that directly competes with the kind or type of products or services developed or being developed, produced, marketed, distributed, planned, furnished or sold by the Company; (ii) recruit, solicit or induce, or attempt to induce, any employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company; or (iii) solicit, divert, reduce, take away, or attempt to divert, reduce or take away, the business or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished or sold by the Company) of any of the Company's clients, customers, or accounts, or prospective clients, customers or accounts, that were contacted, solicited or served by me while employed by the Company.





I hereby agree that each provision of the Agreement shall be treated as a separate and independent clause, and that the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.


AuthenTec, Inc. • P.O. Box 2719 • Melbourne, FL 32902-2719 9 Tel: 1-321-308-1300 • Fax: 1-321-308-1430 • www.authentec.com



Format 12-17-07





Date


By: Arlene Mostowski Director, Human Resources



MUTUAL NONDISCLOSURE AGREEMENT

THIS MUTUAL NONDISCLOSURE AGREEMENT (the "Agreement") is by and between AuthenTec, Inc., a Delaware corporation, with its principal place of business at 709 S. Harbor City Boulevard, Melbourne, FL, 32901, USA ("AuthenTec") and Contractor's Name, an individual, with a principal address at [Insert Address] ("Contractor"). AuthenTec and Contractor agree as follows:

I. Purpose. AuthenTec and Contractor anticipate disclosing Confidential Information for the purpose of providing consulting services to AuthenTec (the "Purpose"). 2. Confidential Information. "Confidential Information" means information disclosed by one party (the "Discloser") to the other party (the "Recipient") in connection with the Purpose, even if before the Effective Date, or that, although not related to the Purpose, is nevertheless disclosed as a result of the parties' discussions in that regard, and that should reasonably have been understood by the Recipient because of legends or other markings, the circumstances of disclosure or the nature of the information itself, to be proprietary and confidential to the Discloser, an Affiliate of the Discloser or to a third party. The term "Confidential Information" includes but is not limited to any (a) inventions, trade secrets, know-how, ideas, processes, formats, formulas, human readable source code on any media, object code, data, programs, specifications, other works of authorship, improvements, discoveries, developments, designs and techniques; (b) information regarding plans for research, development, and product functionality, and (c) non-public market information, product plans, financial information in any form, customer information, business plans and strategies, price lists, and market studies. The term "Affiliate" means any person or entity directly or indirectly controlling controlled by, or under common control with a party. 3. Effective Date, Termination. The Effective Date of this Agreement is Effective Date. This Agreement terminates the earlier of one (1) year after the Effective Date or as terminated by either party upon not less than thirty (30) days prior written notice to the other party. The obligations of Recipient with respect to Confidential Information received prior to termination will survive any termination of this Agreement for a period of five (5) years. 4. Restrictions on Disclosure and Use. Recipient may use the Confidential Information solely for the Purpose and will not disclose Confidential Information, or any derivatives thereof, to any third party. Recipient may disclose the Confidential Information within its business only to those having a need to know for the Purpose and having an obligation to protect information as required by this Agreement. Recipient may disclose Confidential Information to an Affiliate or subcontractor which has a need to know for the Purpose and is subject to a written agreement, substantially in accordance with this Agreement, including obligations not to disclose Confidential Information and not to use it other than for the Purpose. In no case will Recipient or an Affiliate or subcontractor of Recipient use the Confidential Information other than for the Purpose. Further, Recipient shall not reverse engineer, disassemble or decompile any products, prototypes, software source code, object code, or other tangible or intangible objects that embody Confidential Information of the Discloser and that are provided to Recipient hereunder. 5. Proprietary Rights. Other than as expressly stated, no right, title or license in any Confidential Information, including any patent, copyright, trade secret, trademark or any other right in respect of the Confidential Information is granted to the receiving Party under this Agreement by implication or otherwise. Nothing in this Agreement modifies or transfers any existing intellectual property right of the Parties. All inventions, improvements, procedures, programs, developments, discoveries, and other work product including derivative works, created by or with the help of either Party, solely or with others, which are made with or with the help of any AuthenTec Confidential Information (collectively Inventions), are the

Contractor Name

By:

Name:

Title: Contractor

exclusive property of AuthenTec. Contractor will assign and transfer, and irrevocably assigns and transfers to AuthenTec, all right, title, and interest in and to Inventions. 6. Care. Recipient will use the same degree of care in safeguarding the Confidential Information as it uses for its own confidential information of like importance, but no less than reasonable care. Upon discovery of any actual, threatened or improper disclosure or other misuse of Confidential Information, Recipient will promptly notify the Discloser and will act to prevent any further disclosure or misuse. 7. Exceptions. Recipient's obligations of confidentiality and restrictions on use will not apply to information that is: (i) known to Recipient before receipt from Discloser without obligations of confidentiality or restrictions on disclosure; (ii) generally available to the public (or becomes so) without the fault or negligence of Recipient; (iii) received by Recipient from a source other than Discloser without breach of an obligation of confidentiality owed to the Discloser; or (iv) independently developed by Recipient without any use of Discloser's Confidential Information. 8. Required Disclosures. Recipient is permitted to disclose Confidential Information as required by law or regulation provided, however, that Recipient will (a) give Discloser written notice promptly upon receipt of a disclosure requirement and before the disclosure is made, (b) take reasonable actions and provide reasonable assistance to the Discloser to secure confidential treatment of the Confidential Information, and (c) disclose only such Confidential Information as is required. 9. Copies. Recipient will make copies of the Confidential Information only as is necessary for the Purpose. Any copies will reproduce proprietary marking(s) included therein. 10. Return. All Confidential Information will remain the property of Discloser, and Recipient will promptly return all copies, excerpts, and other objects or items in which Confidential Information may be contained or embodied to Discloser upon request or any termination of this Agreement, except that Recipient's legal counsel may retain a copy, for use only as a record of the disclosure. Recipient may choose to destroy such copies, excerpts, objects or items instead of returning them, with written notice to the Discloser. 11. Export Control. The Parties recognize that the communication or transfer of any Confidential Information received may be subject to specific governmental export approval. The parties agree to comply ith all applicable export control laws. 12. Right to Disclose. Each party represents to the other that it has the right to disclose the Confidential Information to the other party. 13. Entire Agreement. This is the entire agreement between the parties as to the subject matter hereof and supersedes any previous agreements, oral or written, as to its subject matter. It may be modified only by written agreement of the parties. 14. Assignment. This Agreement will not be assigned without written authorization of the other party. 15. Governing Law. This Agreement will be governed by the laws of the State of Florida without regard to its choice of law provisions. 16. Signatures. When the authorized representative of either party signs this Agreement, a copy, duplicate or facsimile of such signed agreement will have the same force and effect as one bearing an original signature.

The parties do hereby execute this Agreement as of the Effective Date set forth above.

AuthenTec, Inc.

By:

Name: Frederick R. Jorgenson

Title: Vice President - General Counsel

Doe No, 3072-12-122106


EXHIBIT 3



CASE NO. 6:08-cv-1741--JA-DAB

BRIAN HOFFMAN, Individually And On Behalf of Al! Others Similarly Situated,


vs.


Defendants.

DECLARATION OF VINCE ALVAREZ

I, VINCE ALVAREZ, state that the following facts are true and correct:

1. 1 am a former employee of AuthenTec, Inc. ("AuthenTec") and have personal

knowledge of the facts set forth in this declaration.

2. On January 12, 2009, 1 was provided sections of an amended complaint in the

above-captioned case by Frederick Jorgenson, Vice President & General Counsel at AuthenTec.

Consistent with my obligations as a former employee, I have agreed to keep these materials

confidential.

3. Paragraph 18 of the amended complaint refers to a "former software manager" as

Confidential Witness No. 1 ("CW1") who "reported to the Director of Software Engineering,

David Smith."

4. To the best of my knowledge, I am the only person formerly employed with

AuthenTec who was a "software manager" who reported to David Smith.

5. I believe the amended complaint purports to refer to me as CW1.

6. I am not cooperating with or communicating with the plaintiff, his attorneys, or

investigators in the above captioned matter.


Declaration of V1NCE ALVAREZ January 12, 2009 Page Number 2

I have not and will not provide information, documents, e-mails, statements, or

other assistance to the plaintiff, his attorneys, investigators or any others working with the

plaintiff or his attorneys in the above-captioned matter.

I do not know how the plaintiff or his attorneys obtained the information referred


9. It appears to me that the information referred to in the amended complaint is

proprietary, confidential, and/or trade secret information of AuthenTec.



V~4 J L_'~ - Vince AlvaUz


EXHIBIT 4





CLASS ACTION Plaintiffs,


Defendants.

DECLARATION OF WAYNE H. SANFORD

I, WAYNE H. SANFORD, state the following facts are true and correct:

1. I am employed at AuthenTec, Inc. ("AuthenTec") as the Information Technology

Manager and have personal knowledge of the facts set forth in this declaration.

2. In my role with AuthenTec, I am responsible for Authenlec's electronic

hardware, computer networks, secure data communication, and AuthenTec's facilities

management.


information. Among other things, Authenlec requires all employees and internal subcontractors

to sign a Non-Disclosure Agreement ("Employee NDA") prior to being granted access to

AuthenTec's facilities, confidential information, or computer networks.

4. AuthenTec restricts physical access to its facilities by fingerprint enabled security

or a lock and key at every door.


Declaration of WAYNE H. SANFORD January 16, 2009 Page Number 2

5. All data generated by AuthenTec in the course of its business activities that is

stored in or transmitted on any computer or communication system within the corporate network

is either proprietary, confidential, or a trade secret of AuthenTec. It is the policy of the company

to protect information in accordance with the competitive and contractual value of the

information, the cost of reconstructing the information and the need to preserve the company's

rights and remedies in the event of disclosure or loss.

6. The AuthenTec information technology staff only allows access to the AuthenTec

network to those individuals who have signed an Employee NDA. An individual who accesses

the corporate network must follow a password policy that is used to limit access to the corporate

network to specifically authorized individuals.

7. In addition to password restrictions on AuthenTec's computer network,

Employees are prohibited from disclosing their passwords to others, and passwords are changed

periodically to further enhance the security of the network.

8. On January 9, 2009, I was given email excerpts (without origination or destination

addresses) by AuthenTec's Vice President & General Counsel, Frederick Jorgenson, and was

advised that the Plaintiff in the above-captioned case intended to file an amended complaint with

excerpts from internal AuthenTec e-mails and other documents.

9. 1 immediately launched an internal investigation to verify that the email excerpts

were genuine, and if so, to determine the source of the misappropriated e-mails. In particular,

under my direction, an AuthenTec Network Administrator used a special forensic software utility

program to identify documents and emails. We expanded our forensic investigation with a

software gateway logging tool that is able to search email traffic across our electronic gateway,

independent of whether an email has been deleted from a user's inbox, sent items, or other

electronic mail folders.

10. AuthenTec's information technology department was able to locate each of the e-

mails provided on January 9t1 At this time we have not found any evidence indicating that the


Declaration of WAYNE H. SANFORD January 16, 2009 Page Number 3

security of AuthenTecrs network had been breached or otherwise compromised, but AuthenTecs

investigation is still ongoing.

11. The ernails show that they originate from an Authenlec employee and are

addressed to (1) other Authenlec employees, (ii) an internal AuthenTec distribution list, or (iii)

limited third parties with whom there exists confidentiality obligations.

12. I received the Amended Complaint, and it did, in fact, contain excerpts from a

series of internal and highly confidential e-mails from AuthenTec.



Wayne H. Sanf

'It appears from the emails that the limit of third party distribution was individual contractors and Arachnoid Biometrics Identification Group Corp (all of whom have written obligations of confidentiality).


EXHIBIT 5



CASE NO. 6:08-cv-1741-JA-0A13



vs.

AUTFIENTEC, INC., F. SCOTT MOODY, and GARY LARSEN,

Defendants.

DECLARATION OF DAVE COL WELL

I, DAVE COL WELL, state that the following facts are true and correct:

1. 1 am President at Concord Sales Inc. which undertakes business in the name of

Concord Marketing International ("Concord") and have personal knowledge of the facts set forth

in this declaration.

2. Concord is the sole outside sales representative for AuthenTec, Inc.

("AuthenTec") at Dell Inc. ("Dell"). In my role at Concord, I am the primary representative on

behalf of AuthenTec at Dell.

On January 13, 2009, 1 was advised by Frederick Jorgenson, Vice President &

General Counsel at AuthenTec that the amended complaint in the above referenced matter

identifies a confidential witness ("CW3") as an outside sales representative. I understand that

paragraph 21 of the amended complaint states that "Dell was no longer giving PC business to

AuthenTcc."

4. AuthenTec was a major supplier of fingerprint sensors to Dell in 2008, and will

continue to be a major supplier in 2009.

The fingerprint sensor business for computer notebooks and laptops is highly

competitive with only a handful of genuine competitors.


Declaration of Dave Colwell January 14, 2009 Page No. 2

6. The vast majority of fingerprint sensor volume purchases are made by the top ten

computer manufacturers (and their contract manufacturers), which includes Dell.

7. As an informed sales representative of AuthenTec, I am familiar with

AuthenTec's proprietary information by virtue of Authenlec' s disclosures of such information

to me under a contractual obligation of confidentiality and non-disclosure. If sensitive

confidential or proprietary information of AutbenTec became available via a public court filing, I

would have serious concerns that such information would be used by one of AuthenTec's

competitors to the detriment of AuthenTec.

1 have had no communications with the plaintiff, his attorneys, or investigators in

the above captioned matter.

9. 1 do not know bow the plaintiff or his attorneys obtained any of the information

referred to in the amended complaint.

10. In my opinion, the statements attributed to CW3 in the amended complaint would

damage AuthenTec in the pursuit of its business opportunities.

I declare under penalty of perjury under theJns of the United States of America that the

foregoing is true and correct.

Date