Exhibit 10.1

EXECUTION COPY

Violin Memory, Inc.

4555 Great America Parkway

Santa Clara, California 95054

April 12, 2014

VIA FAX AND EMAIL

Clinton Relational Opportunity Master Fund, L.P.

c/o Clinton Group Inc.

601 Lexington Avenue, 51st Floor

New York, NY 10022

Attention: Greg Taxin and Joseph De Perio

Dear Mr. Taxin and Mr. De Perio:

This letter (the “Letter”) constitutes the agreement between Violin Memory, Inc.
(the “Company”) and Clinton Relational Opportunity Master Fund, L.P. (together
with its affiliates, the “Clinton Group”). As we have previously discussed, the
Clinton Group and the Company agree to the following:

 

  1. Promptly following the execution of this Letter, the Company will take all
necessary action to (i) increase the size of the board of directors of the
Company (the “Board”) from seven to eight members and (ii) appoint
Mr. Vivekanand Mahadevan (“Mr. Mahadevan”) as a Class II Director of the Board
with a term expiring at the 2015 annual meeting of the stockholders of the
Company.

 

  2. The Company agrees that, effective immediately upon Mr. Mahadevan’s
appointment to the Board, for the remainder of his term, Mr. Mahadevan shall be
offered the opportunity to serve as a member of the Audit Committee of the Board
(the “Audit Committee”), unless Mr. Mahadevan, in his sole discretion, declines
to serve on such committee; provided, Mr. Mahadevan shall be entitled to serve
on the Audit Committee only if he meets any independence or other requirements
pursuant to New York Stock Exchange listing standards or applicable law for
service on the Audit Committee.

 

  3. The Clinton Group hereby agrees to (i) concurrently with issuance of the
Mutual Press Release, withdraw its Stockholder Notice of Intent to Present a
Proposal and Nominate Persons for Election as Directors at the 2014 Annual
Meeting of Stockholders of Violin Memory, Inc., dated March 18, 2014, setting
forth its two nominees to the Board, and (ii) cause all Voting Securities (as
defined below) that it is entitled to vote at the Company’s 2014 annual meeting
of its stockholders, or any other meeting of stockholders held in lieu thereof,
and any adjournments, postponements, reschedulings or continuations thereof (the
“2014 Annual Meeting”), (whether held of record or beneficially) to be present
for quorum purposes and to be voted at the 2014 Annual Meeting in favor of
(A) the election of each of the Board’s nominees that is currently an incumbent
director for election as a Class I Director of the Board, (B) approval of the
material terms of the Company’s 2012 Stock Incentive Plan solely to preserve the
Company’s ability to receive corporate income tax deductions that otherwise may
be disallowed pursuant to Internal Revenue Service Code Section 162(m), and
(C) ratification of the engagement of KPMG LLP as the Company’s independent
registered public accounting firm.

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  4. The Company hereby agrees that if at any time during the Standstill Period
(as defined below), Mr. Mahadevan is no longer willing or able to serve on the
Board (including, but not limited to, as a result of removal, death or
disability), the Clinton Group shall have the right to submit the name of a
replacement person (the “Replacement”) who shall serve as the nominee for
election as director or serve as director for the remainder of Mr. Mahadevan’s
term; provided that any Replacement submitted by the Clinton Group pursuant to
this paragraph 4 shall qualify as “independent” pursuant to New York Stock
Exchange listing standards, and have relevant financial and business experience
to fill the resulting vacancy. If the proposed Replacement is not accepted by
the Nominating and Corporate Governance Committee of the Board (the “Nominating
Committee”), the Clinton Group shall have the right to submit another proposed
Replacement for consideration by the Nominating Committee. The Clinton Group
shall have the right to continue submitting the name of a proposed Replacement
for consideration by the Nominating Committee until the Nominating Committee
approves that such Replacement may serve as a nominee for election as director
or serve as a director for the remainder of Mr. Mahadevan’s term whereupon such
person is appointed as the Replacement.

 

  5. The Clinton Group agrees that from the date of this Letter and until the
earlier of (i) the date that is 20 days prior to the expiration of the Company’s
advance notice period for the nomination of directors or presentation of
proposals at the 2015 annual meeting of the Company, or (ii) such date that the
Company has materially breached any of its commitments or obligations under
paragraphs 1, 2, 4, 7, 9, 12 or 13 of this Letter, except that if such material
breach can be cured, the Clinton Group shall provide written notice to the
Company that the Company has materially breached its commitments or obligations
under paragraphs 1, 2, 4, 7, 9, 12 or 13 of this Letter, as the case may be, and
the Company shall have an additional 10 days after the date of such written
notice within which to cure its material breach (such period, the “Standstill
Period”), the Clinton Group will not, and will cause its principals, directors,
stockholders, members, partners, officers, employees, agents and affiliates not
to, in any way, directly or indirectly:

 

  (a) acquire any Voting Securities that, at the time of such acquisition, would
result in the Clinton Group owning, in the aggregate, greater than 10% of the
then-outstanding Voting Securities of the Company;

 

  (b) make, participate in or encourage any “solicitation” (as such term is used
in the proxy rules of the Securities and Exchange Commission (the “SEC”)) of
proxies with respect to the election or removal of directors or other matters or
proposals proposed for consideration at a meeting of the Company’s stockholders
or seek to advise, encourage or influence any Person with respect to such
solicitations; provided, however, that nothing herein will limit the ability of
any member of the Clinton Group, or its respective affiliates, except as
otherwise provided in this paragraph 5, to vote or tender any Voting Securities
pursuant to any solicitation by a third party;

 

  (c) initiate, propose or otherwise “solicit” (as such term is used in the
proxy rules of the SEC), directly or indirectly, the Company’s stockholders for
the approval of shareholder proposals, whether made pursuant to Rule 14a-4 or
Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise, or cause or encourage any Person to initiate any such
shareholder proposal;

 

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  (d) seek, alone or in concert with others, election or appointment to, or
representation on, or nominate or propose the nomination of any candidate to the
Board, or seek, alone or in concert with others, the removal of any member of
the Board;

 

  (e) form or join in a partnership, limited partnership, syndicate or other
group, including, without limitation, a “group” as defined under Section 13(d)
of the Exchange Act, with respect to any Voting Securities, or deposit any
Voting Securities into a voting trust, arrangement or agreement or subject any
Voting Securities to any voting trust, arrangement or agreement, in each case
other than solely with an affiliate of the Clinton Group with respect to Voting
Securities now or hereafter owned by it;

 

  (f) publicly act alone or in concert with others to control or seek to
control, or influence or seek to influence, the management, the Board or the
policies of the Company (other than Mr. Mahadevan acting in his capacity as a
director of the Company);

 

  (g) with respect to the Company or the Voting Securities, (i) otherwise
communicate with the Company’s stockholders or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act or (ii) conduct any nonbinding
referendum;

 

  (h) have any discussions or communications, or enter into any arrangements,
understanding or agreements (whether written or oral), with, or advise, finance,
assist or encourage, any other Person in connection with any of the foregoing,
or make any investment in or enter into any arrangement or understanding or form
a “group” with any other Person that engages, or offers or proposes to engage,
in any of the foregoing;

 

  (i) publicly make or disclose any statement regarding any intent, purpose,
plan or proposal with respect to the Board, the Company, its management,
policies, affairs or assets, or the Voting Securities or this Letter that is
inconsistent with the provisions of this Letter; provided, however, that nothing
herein shall prohibit the Clinton Group from (i) expressing its views on any
publicly announced transaction approved by the Board as a result of which
(x) the holders of the Voting Securities immediately prior to the consummation
of such transaction would cease to own at least a majority of the issued and
outstanding shares of common stock of the resulting company (or, if such
resulting company is a subsidiary, then the ultimate parent company), or (y) all
or substantially all of the assets of the Company will be sold, or
(ii) complying with legal or regulatory requirements, including, without
limitation, the filing of any report or schedule required to be filed with the
SEC, provided that if taking any of the actions enumerated in clauses
(b) through (i) of this paragraph 5 would require the Clinton Group to file a
report or schedule with the SEC (or an amendment thereto) disclosing such
action, the Clinton Group shall not take such action, notwithstanding this
clause (ii); or

 

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  (j) take or seek to take, or cause or seek to cause or solicit others to take,
directly or indirectly, any action inconsistent with any of the foregoing.

 

  6. During the Standstill Period, each of the Company and the Clinton Group
covenant and agree that, neither it nor any of its respective agents,
subsidiaries, affiliates, successors, assigns, officers, key employees or
directors and, with respect to the Clinton Group, Mr. Mahadevan or any
Replacement, shall in any way disparage, call into disrepute, or otherwise
defame or slander the other party hereto or such other party’s subsidiaries,
affiliates, successors, assigns, officers or directors, or any of their products
or services, in any manner that would damage the business or reputation of such
other party, its products or services or its subsidiaries, affiliates,
successors, assigns, officers or directors.

 

  7. Promptly following the execution of this Letter, the Company and the
Clinton Group shall jointly issue a mutually agreeable press release (the
“Mutual Press Release”) announcing certain terms of this Letter, in the form
attached hereto as Exhibit A. Prior to the issuance of the Mutual Press Release,
neither the Company nor the Clinton Group shall issue any press release or make
any public announcement regarding this Letter without the prior written consent
of the other party. Promptly following the publication of the Mutual Press
Release, the Company shall file with the SEC a Current Report on Form 8-K (the
“Form 8-K”) that includes the Mutual Press Release and this Letter. The Company
shall provide the Clinton Group with a copy of the Form 8-K (including any and
all exhibits thereto) within a reasonable period in advance of filing the Form
8-K with the SEC in order to provide the Clinton Group with a reasonable
opportunity to review and comment on such materials. Except for the Mutual Press
Release and the Form 8-K, neither the Company nor the Clinton Group shall make
any public announcement or statement that is inconsistent with or contrary to
the statements made in the Mutual Press Release, except as required by law or
the rules of any stock exchange or with the prior written consent of the other
party.

 

  8. The Company and the Clinton Group each acknowledge and agree that money
damages would not be a sufficient remedy for any breach (or threatened breach)
of this Letter by it and that, in the event of any breach or threatened breach
hereof, the non-breaching party will be entitled to seek injunctive and other
equitable relief, without proof of actual damages, that the breaching party will
not plead in defense thereto that there would be an adequate remedy at law, and
that the breaching party agrees to waive any applicable right or requirement
that a bond be posted by the non-breaching party. Such remedies will not be the
exclusive remedies for a breach of this Letter, but will be in addition to all
other remedies available at law or in equity.

 

  9. Concurrently with the execution of this Letter, the Board shall authorize
the reimbursement to the Clinton Group of up to $25,000.00 of the reasonable and
documented out-of-pocket third party expenses incurred by the Clinton Group in
connection with this Letter and related matters, and such reimbursement shall be
paid to the Clinton Group within five business days of the date such expenses
are submitted.

 

  10.

As used in this Letter, (a) the term “Person” shall be shall be interpreted
broadly to include, among others, any individual, general or limited
partnership, corporation, limited liability or unlimited liability company,
joint venture, estate, trust, group, association or other entity of any kind or
structure; (b) the term “affiliate” shall have the meaning set forth in Rule
12b-2 under the Exchange Act and shall include Persons who become affiliates of
any Person subsequent to the date of this Letter; and (c) the term “Voting
Securities” shall mean the shares of the Company’s common stock and any other
securities of the Company entitled to

 

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  vote in the election of directors, or securities convertible into, or
exercisable or exchangeable for, such common stock or other securities, whether
or not subject to the passage of time or other contingencies.

 

  11. This Letter may be executed by the parties hereto in separate counterparts
(including by fax and .pdf), each of which when so executed shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

 

  12. This Letter shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to its conflict of laws principles.
Each of the parties hereto: (i) consents to submit itself to the personal
jurisdiction of the Court of Chancery or other federal or state courts of the
State of Delaware in the event any dispute arises out of this Letter or the
transactions contemplated by this Letter, (ii) agrees that it shall not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (iii) agrees that it shall not bring any action
relating to this Letter or the transactions contemplated by this Letter in any
court other than the Court of Chancery or other federal or state courts of the
State of Delaware, and each of the parties irrevocably waives the right to trial
by jury and (iv) each of the parties irrevocably consents to service of process
by a reputable overnight mail delivery service, signature requested, to the
address of such parties’ principal place of business or as otherwise provided by
applicable law.

 

  13. This Letter constitutes the only agreement between the Clinton Group and
the Company with respect to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written. This Letter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No party
hereto may assign or otherwise transfer either this Letter or any of its rights,
interests, or obligations hereunder without the prior written consent of the
other parties hereto. Any purported transfer without such consent shall be void.
No amendment, modification, supplement or waiver of any provision of this Letter
shall be effective unless it is in writing and signed by the party hereto
affected thereby, and then only in the specific instance and for the specific
purpose stated therein. Any waiver by any party hereto of a breach of any
provision of this Letter shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of
this Letter. The failure of a party hereto to insist upon strict adherence to
any term of this Letter on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Letter.

 

  14. This Letter is solely for the benefit of the parties hereto and is not
enforceable by any other Persons.

[The remainder of this page is intentionally left blank.]

 

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If you are in agreement with the steps outlined above, please countersign in the
space provided below.

 

Very truly yours, VIOLIN MEMORY, INC. By:  

/s/ KA DeNuccio

  Name:   KA DeNuccio   Title:   CEO

Acknowledged and agreed:

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

 

By:  

/s/ John Hall

  Name:   John Hall   Title:   Authorized Signatory

 

cc:       Kenton J. King, Skadden, Arps, Slate, Meagher & Flom LLP       James
J. Masetti, Pillsbury Winthrop Shaw Pittman LLP       David E. Rosewater,
Schulte Roth & Zabel LLP

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Exhibit A

Mutual Press Release

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NOT FOR IMMEDIATE RELEASE

Violin Memory Appoints Vic Mahadevan to Board of Directors

SANTA CLARA, CA—APRIL 14, 2014 – Violin Memory, Inc., (NYSE: VMEM) a leading
provider of flash storage arrays and appliances delivering application solutions
for the enterprise, today announced the appointment of Vic Mahadevan to its
Board of Directors, effective immediately. Mahadevan has been appointed to the
class of directors that will stand for election at the Company’s 2015 Annual
Meeting of Stockholders. With his appointment, Violin Memory has expanded its
board from seven directors to eight, seven of whom are non-management directors.

“We are pleased to welcome Vic to our Board, and we look forward to benefitting
from his insights and contributions,” said Kevin DeNuccio, president and chief
executive officer. “His significant senior management experience in the
industry, specifically in the enterprise storage space as Chief Strategy Officer
for NetApp, will be invaluable as we continue to push forward with our strategic
initiatives to improve execution, continue to lead the storage market with our
technology, and drive sustainable long-term growth.”

“I am honored to join Violin Memory’s Board of Directors,” said Mahadevan.
“Violin is a great company with unmatched enterprise and cloud storage
solutions, a rapidly expanding customer base, and significant growth
opportunities in the evolving market for enterprise flash solutions. I look
forward to working with the board as Violin embarks on its next phase of growth
and works to generate value for all Violin Memory stockholders.”

In connection with today’s announcement, Violin Memory has entered into an
agreement with Clinton Group, Inc. (the “Clinton Group”). Under the agreement,
the Clinton Group will, among other things, vote its shares in favor of the
election of the Company’s slate of directors at the Company’s 2014 Annual
Meeting of Stockholders. In addition, the Clinton Group has agreed to customary
standstill provisions. The agreement will be filed in a form 8-K with the
Securities and Exchange Commission later today.

“We are supportive of the steps the Board of Directors and management have taken
to reorient the Company to an improved strategy for achieving growth and
profitability,” said Joseph A. De Perio, Senior Portfolio Manager of Clinton
Group, Inc. “We appreciate Violin Memory’s willingness to engage constructively
with stockholders, and we believe Vic Mahadevan’s significant domain expertise
and experience will benefit all of Violin Memory’s stockholders.”

In addition, Violin Memory announced that it is postponing the Company’s 2014
Annual Meeting of Stockholders to a date to be later determined by the Board.
Violin Memory had previously disclosed on Form 8-K on March 13, 2014, that it
established May 23, 2014 as the date for its 2014 Annual Meeting, the Company’s
first Annual Meeting as a public company.

About Vivekanand Mahadevan

Vivekanand Mahadevan has been an independent business consultant since March
2012. Mahadevan was previously the Chief Strategy Officer for NetApp, Inc., a
supplier of enterprise storage and data management software and hardware
products and services, from November 2010 until February 2012 and prior to that
time served as Vice President of Marketing for LSI Corporation, an electronics
company that designs semiconductors and software that accelerate storage and
networking, from January 2009

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to September 2010. Prior to LSI Corporation, he was Chief Executive Officer for
Deeya Energy, Inc., a company that develops and manufactures stationary
electrical energy storage solutions, from December 2007 to July 2008. Mahadevan
has also held senior management positions with leading storage and systems
management companies including BMC Software, Compaq, Ivita, and Maxxan Systems.
Mahadevan also currently serves on the board of directors of Overland Storage,
Inc., a provider of data management and data protection products, where he has
served since November 2012.

About Violin Memory, Inc.

Business in a Flash. Violin Memory transforms the speed of business with high
performance, always available, low cost management of critical business
information and applications. Violin’s All Flash optimized solutions accelerate
breakthrough CAPEX and OPEX savings for building the next generation data
center. Violin’s Flash Fabric Architecture (FFA) speeds data delivery with
chip-to-chassis performance optimization that achieves lower consistent latency
and cost per transaction for Cloud, Enterprise, and Virtualized mission-critical
applications. Violin’s All Flash Arrays and Appliances, and enterprise data
management software solutions enhance agility and mobility while revolutionizing
datacenter economics. Founded in 2005, Violin Memory is headquartered in Santa
Clara, California. For more information, visit www.violin-memory.com. Follow us
on Twitter at twitter.com/violinmemory

About Clinton Group, Inc.

Clinton Group, Inc. is a diversified asset management firm that is a Registered
Investment Advisor. The firm has been investing in global markets since its
inception in 1991 with expertise that spans a wide range of investment styles
and asset classes.

Forward Looking Statements

This public announcement contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including statements
with respect to the settlement agreement with the Clinton Group and Violin
Memory’s strategic plans, growth and profitability. There are a significant
number of factors that could cause actual results to differ materially from
statements made in this press release, including: Violin Memory’s history of
large purchases by a limited number of customers; its limited operating history,
particularly as a new public company; risks associated with a transition in
executive leadership; its relationship with Toshiba as its sole supplier of
flash-based memory; as well as general market, political, economic and business
conditions. Additional risks and uncertainties that could affect Violin Memory’s
financial results are included under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” in the company’s quarterly report on Form 10-Q, which was filed
with the U.S. Securities and Exchange Commission, and is available on the
Company’s investor relations website at investor.violin-memory.com and on the
SEC’s website at www.sec.gov. All forward-looking statements in this public
announcement are based on information available to the Company as of the date
hereof, and Violin Memory does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made.

All Violin Memory news releases (financial, acquisitions, manufacturing,
products, technology, etc.) are issued exclusively by Business Wire and are
immediately thereafter posted on the company’s external website,
www.violin-memory.com. Violin, Violin Memory and the Violin Memory logo are
trademarks of Violin Memory, Inc. in the U.S. and other countries. All other
brand or product names used in this public announcement may be trademarks of
their respective owners.

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Contacts:

Investor Relations

650-396-1525

ir@vmem.com

Media

Eastwick

Suzanne Chan, 415-820-4165

violin@eastwick.com

Joele Frank, Wilkinson Brimmer Katcher

Matthew Sherman / Mahmoud Siddig

212-355-4449