Exhibit 10.1

 

 

July 13, 2015

 

 

Manuel A. Villafaña

3405 Annapolis Lane North

Suite 200

Minneapolis, MN 55447

 

Re:     Letter Agreement

 

Dear Manny:

 

The purpose of this letter agreement (this “Agreement”) is to summarize certain
material terms regarding your future employment with Kips Bay Medical, Inc. (the
“Company”) in light of the decision by the Board of Directors of the Company
(the “Board”) to seek a voluntary dissolution and liquidation of the Company
(the “Dissolution”).

 

This Agreement is intended to amend that certain Employment Agreement effective
as of July 1, 2015 between the Company and you (the “Employment Agreement”) and
except as specifically set forth in this Agreement, the parties to this
Agreement hereby agree that the Employment Agreement will be and remain in full
force and effect. This Agreement, together with the Employment Agreement,
evidences the entire agreement of the parties hereto with respect to the subject
matter hereof, and all prior oral discussions and writings are merged into this
Agreement and the Employment Agreement.

 

1.     Position. You will continue in your present full time positions of
Chairman of the Board of Directors, Chief Executive Officer and President until
the completion of the next meeting of stockholders of the Company, which is
currently intended to take place in September 2015 (the “Stockholder Meeting”).
After completion of the Stockholder Meeting, you will resign as Chairman of the
Board of Directors, Chief Executive Officer and President of the Company and as
a director, officer and employee of the Company effective immediately.

 

2.      Severance. You will not be paid any severance upon the termination of
your employment with the Company.

 

3.      Base Salary. So long as you remain Chairman of the Board of Directors,
Chief Executive Officer and President of the Company, the Company will pay you
your current base salary of US $215,000 per annum until July 31, 2015 and
thereafter a base salary of US $100,000 per annum until the date of the
Stockholder Meeting.

 

4.      Benefits. So long as you remain Chairman of the Board of Directors,
Chief Executive Officer and President of the Company, you and, to the extent
eligible, your dependents, will remain eligible to participate in and receive
benefits under welfare benefit plans, retirement plans and programs, and other
programs provided by the Company to its executive employees generally, subject,
however, to the applicable eligibility and other provisions of the plans and
programs in effect from time to time. Notwithstanding the foregoing, you
understand, acknowledge and agree that in order to save costs and expenses, the
Company intends to terminate its 401(k) plan on or around August 14, 2015 and
that in order to remain eligible for certain benefits, you must work a certain
minimum number of hours per week.

 

 
 

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5.     At Will Employment. Notwithstanding anything in this Agreement or the
Employment Agreement to the contrary, nothing in this Agreement or the
Employment Agreement constitutes a promise of continued employment of you by the
Company. Your employment with the Company is and will remain “at-will,” meaning
that either you or the Company may terminate the employment relationship at any
time for any reason and, in light of the decision by the Board to pursue the
Dissolution, without the obligation of the Company to pay you any severance.

 

6.     Counterparts. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party
hereto and delivered to the other party, it being understood that both parties
hereto need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a ".pdf" format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or ".pdf" signature page were an original
thereof.

 

Manny, on behalf of the Compensation Committee and the independent directors of
the Company, we thank you for your long-standing dedication and service to the
Company and your willingness on the terms and conditions of this Agreement to
assist the Company in the wind-down of its business and operations.

 

Sincerely,

 

/s/ Robert Sheehy

 

Robert Sheehy

Chair of the Compensation Committee

of the Board of Directors, Kips Bay Medical, Inc.

 

 
 

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ACCEPTANCE

 

By signing below, I acknowledge that I have read, understand, and accept the
terms and conditions of the foregoing Agreement, which I accept as of this
20th day of July, 2015:

   

 

/s/ Manuel A.
Villafaña                                                                                                

Manuel A. Villafaña