Document:

exv10w27

EXHIBIT 10.27

30, June 2008

Frederick M Bauer

1492 N. Portsmouth Circle

Orange, CA 92869-1511

Re: Offer Letter and Employment Terms

Dear Fred:

Everyone at Cardica is excited that you are joining the team. We are impressed with your background
and accomplishments and are confident that you will flourish at Cardica, Inc. (the “Company”). On
behalf of the Company, I am pleased to offer you the position of Vice President, Manufacturing &
Operations. Your employment terms and other matters are described below.

Your duties and responsibilities include leading all operations/manufacturing functions, along with
all facility related responsibilities. The Company may change your position and responsibilities
from time to time as it deems necessary. You will be based in Redwood City, CA and will report to
me, Bernard Hausen, President & CEO.

Your base salary rate of pay will be Nineteen Thousand One Hundred Sixty-six Dollars and Sixty-six
cents ($19,166.00) per month, less applicable payroll deductions and all required withholdings. You
will be paid semi-monthly, and you will be eligible for the following Company benefits: health
insurance, life insurance/AD&D and long-term/short-term disability insurance, employee assistance
program (EAP), flexible spending plan (FSA), 401(k) plan, health club, paid time off (PTO) and
holidays. Due to your pre-scheduled personal events, you will be permitted an additional 7 days of
unpaid time off between now and the end of this calendar year.

In the position of Vice President, Manufacturing & Operations, you are eligible to participate in
Cardica’s annual performance-based Executive Bonus Program, which runs concurrently with our fiscal
year of July — June. The current target bonus for this position is 25% of you base annual salary.

To assist you in your relocation from Orange County, CA to the San Francisco Bay Peninsula, Cardica
will provide the following benefits and accommodations:

	 	•	 	Up to three months of temporary housing on the SF Bay Peninsula in the form of a
furnished apartment for you and your spouse, actual costs not exceed $3,000 per month;
temporary housing is expected to commence thirty days from the commencement of your
employment; T&E during your first thirty days of employment with Cardica will be
considered business travel as you assimilate into the Company, and will be reimbursed
through the Company’s normal business expense travel policy;

 

 

	 	•	 	Packing, shipping and unpacking of household goods, including one car (not to
exceed 20,000 lbs);
	 
	 	•	 	Two (2) round-trip airline fares for your spouse (to/from Southern California);
	 
	 	•	 	Six (6) round trip economy/coach airline fares for you to/from Southern California
to return home during your temporary living (assumes 2x/month at a total cost of all
home visit air expense not to exceed $1,620);
	 
	 	•	 	One-way airline travel for you and your spouse from Southern California to Northern
California on final trip, along with mileage reimbursement for one car;
	 
	 	•	 	Miscellaneous lump sum moving allowance in the amount of $1,500.00

Regarding your relocation, Cardica will contract with Plus Relocation to assist you, including tax
equalization to be coordinated with Cardica Payroll. It is expected that the total expenses,
including the tax equalization, not exceed $40,000 (you may reference the attached relocation
expense itemization for the complete details).

Upon execution of this offer letter and the Employee Proprietary Information and Inventions
Agreement in the form attached hereto as Exhibit A, and the commencement of your full-time
employment with the Company, it will be recommended to the Board of Directors of the Company that
you be granted an incentive stock option for Seventy Thousand (70,000) shares of the Company’s
Common Stock (the “Option”), at an exercise price equal to the fair market value of Common Stock at
the time of grant. The Seventy Thousand (70,000) shares shall be vested as follows: 25% of the
shares shall vest on the one year anniversary, provided you are still employed by the Company as of
such date; thereafter, 1/48 of the shares shall vest monthly until either (i) you cease to provide
services to the Company for any reason, or (ii) the Options become fully vested.

As a Company employee, you will be expected to abide by Company rules and regulations, and sign and
comply with the attached Proprietary Information and Inventions Agreement attached hereto as
Exhibit A (the “Employee Proprietary Agreement”).

You may terminate your employment with the Company at any time and for any reason whatsoever simply
by notifying the Company. Likewise, the Company may terminate your employment at any time and for
any reason whatsoever, with or without cause or advance notice. This at-will employment
relationship cannot be changed except in writing signed by a duly authorized officer of the
Company.

This letter, together with Exhibit A, forms the complete statement of your employment agreement
with the Company. The employment terms in this letter supersede any other agreements or promises
made to you by anyone, whether oral or written. This offer is subject to satisfactory proof of
your right to work in the United States, and as required by law, you must provide the necessary
documentation within 72 hours after you begin working.

Please sign and date this letter and the attached Employee Proprietary Agreement, and return it to
me by close of business on 3 July 2008, if you wish to accept this offer of employment at the
Company under the terms of this letter.

2

 

Everyone involved with the enterprise believes that the Company will thrive and grow in the years
to come. We look forward to working with you in this unique growth opportunity and in having you
join our team. If you have any questions regarding this offer, please call me directly at (650)
331-7124.

Sincerely,

/s/ Bernard Hausen

Dr. Bernard Hausen

President, CEO and Co-Founder

Accepted:

	 	 	 
	/s/ Frederick Bauer
 

Frederick Bauer

	 	 
	 
	 	 
	June 30, 2008
 

Date Signed

	 	 
	 
	 	 
	14 July 2008
	 	 
	 

Start Date

	 	 

Attachments:

Exhibit A: Proprietary Information and Inventions Agreement

3exv10w28

Exhibit 10.28

Non-Employee Director Compensation

     Cash compensation for non-employee directors is as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Committee
	 	 	Annual	 	Board Meeting Attended	 	Meeting
	Position	 	Retainer*	 	In Person	 	By Telephone	 	Attended
	Board Chairman
	 	$	30,000	 	 	$	2,000	 	 	$	500	 	 	$	500	 
	Audit Committee Chairman
	 	$	30,000	 	 	$	2,000	 	 	$	500	 	 	$	500	 
	Compensation Committee Chairman
	 	$	27,500	 	 	$	2,000	 	 	$	500	 	 	$	500	 
	Nominating and Corporate Governance Committee Chairman
	 	$	25,000	 	 	$	2,000	 	 	$	500	 	 	$	500	 
	Board Member (other than Board or Committee Chairs)
	 	$	20,000	 	 	$	2,000	 	 	$	500	 	 	$	500	 

 

			
	*	 	Each non-employee director is entitled to only one annual retainer fee.

     Equity compensation for non-employee directors is as follows:

     Annual Grants. Each year, immediately following Cardica, Inc.’s Annual Meeting of
Stockholders, each non-employee director will be granted an option to purchase 5,000 shares of the
Company’s common stock. Each such option will vest monthly over the ensuing year.

     Initial Grants. Automatically upon becoming a director, any new non-employee director
shall be granted an option to purchase 15,000 shares of Cardica, Inc.’s common stock, vesting
monthly over three years.

     The foregoing compensation for non-employee directors was approved by Cardica, Inc.’s board of
directors on August 13, 2008, effective immediately.exv10w44

Exhibit 10.44

FY2008

Executive Incentive Plan

Clent Richardson

 

 

OBJECTIVES 

The specific aim of the 2008 Executive Incentive Plan is to focus Immersion’s executive
management on Immersion’s revenue, operating profit, gross margin goals and business objectives,
and to reward achievement of those goals.

ELIGIBILITY 

In addition to your base salary, you are eligible to earn an incentive payment under Immersion’s
2008 Executive Incentive Plan as set out in this Plan and the attached document titled
Attachment A. In order to be eligible to receive any payment under this Plan, you must sign and
date a copy of the Plan on the space provided below and return it to Human Resources. An
executive’s eligibility to participate in this Plan will be subject to the review and approval
of the CEO and CFO of the Company, and any payments under this Plan will be subject to the
review and approval of the Company’s CEO, which approval may be withheld in his/her sole
discretion. This Plan supersedes all prior executive bonus, incentive, and/or variable
compensation plans of the Company, which are of no further force or effect.

Employees hired after January 1, and during the Plan Period who are permitted to participate in
the Plan shall be eligible to participate on a pro-rata basis, based upon their start date and
contingent upon continued active employment through the date when the Bonus Plan payout occurs.
The proration will be based on the number of work days during the plan year.

PLAN ADMINISTRATION 

This Plan is effective for the Company’s 2008 fiscal year. The Company may cancel, suspend,
amend, or revise all or any part of the Plan for any reason at any time.

To the extent earned, payments hereunder will be wages and will be subject to withholding of
federal and state income and employment taxes. Earned payments under this Plan will be paid on
the next regular payroll date following the later of (a) 45 days after the end of the fiscal
year, (b) the date on which the Company’s Income Statement for the year has been finalized, or
(c) the date on which the Company’s earnings for the year have been publicly disclosed (the
“Payment Date”).

Nothing in this Plan shall in any way alter the at-will employment relationship between the
Company and its executives. All employees of the company are employed on an “at-will” basis,
which means that either the employee or the Company may terminate the relationship at any time,
with or without cause or notice.

For purposes of this Plan, a participant’s employment with Immersion terminates on the last day
on which work duties are actually performed by the participant. Periods of pay in lieu of
notice, severance, or any other post-termination benefits or compensation period shall not be
deemed periods of employment for purposes of this Plan. In order to earn any payment under the
Plan, a participant must have been continuously employed by Immersion from April 28, 2008
through the Payment Date. A participant who resigns from his employment with Immersion prior to
the Payment Date, or whose employment is terminated prior to the Payment Date, will not earn any
payment under this Plan.

Provided they meet the other eligibility requirements described in this Plan, participants who
are on an approved leave of absence at any time during the 2008 fiscal year will earn a pro
rated payment under this Plan based upon the portion of the year that they are actively employed
and not on leave status. To the extent that a participant is on an approved leave of absence on
the Payment Date, he/she will not earn any payment under this Plan unless he/she returns to
active employment with Immersion, at which time he/she will receive his/her Plan payment.

 

 

PLAN DEFINITIONS 

Revenue is revenue that is recognized by Immersion for the applicable period in accordance with
generally accepted accounting principles and as reported in the Company’s audited financial
statements.

Cost of Goods Sold is the direct and allocated indirect production costs of producing goods and
services.

Gross Margin (GM) is determined by subtracting the Cost of Goods Sold (COGS) from the actual
sale price of the product. The net result is the GM. GM excludes non cash stock compensation
expense for the purposes of this Executive Incentive Plan.

Operating Profit (Loss) is Business Unit Operating Profit (Loss) less corporate support costs,
litigation expenses, and intangible amortization. Operating Profit (Loss) excludes non cash
stock compensation expense for the purposes of this Executive Incentive Plan.

Business Unit Operating Profit (Loss) is the revenue less departmental cost of goods sold and
direct operating expenses for a business unit. Direct operating expenses are the expenses
directly charged to a business unit including all variable compensation accruals and all
allocated departmental expenses. Business Unit Operating Profit (Loss) excludes non cash stock
compensation expense for the purposes of this Executive Incentive Plan.

Target Incentive is a percentage determined by management of the participant’s annual base
salary as of February 4, 2008. The actual bonus amount will vary depending on the extent to
which Company performance targets, Business Unit targets, and milestones are met as determined
by the Company at its sole discretion.

MBO’s are specific business milestones which must be completed, in strict accordance with the
stated terms and conditions associated with each MBO, to the satisfaction of the CFO and CEO.

	 	 	 	 	 	 	 
	/s/ Clent Richardson
 

Executive

	 	 	 	8/7/08
 

Date
	 	 
	 
	 	 	 	 	 	 
	/s/ Janice Passarello

	 	 	 	8/6/08	 	 
	 

	 	 	 	 	 	 
	VP of Human Resources

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ S M Ambler

	 	 	 	7 August 2008	 	 
	 

	 	 	 	 	 	 
	CFO

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ Jack L Saltich

	 	 	 	12 August 2008	 	 
	 

	 	 	 	 	 	 
	Chairman, Compensation Committee

	 	 	 	Date	 	 

 

 

Attachment A

EXECUTIVE INCENTIVE PLAN STATEMENT OF GOALS FOR YEAR 2008

Clent Richardson

Percent of Base Salary Payment at Plan: 100%

The following is a statement of financial, strategic and tactical objectives for 2008 that will
serve as a basis for overall performance evaluation and determination of year-end executive
incentive award.

Board of Directors Discretionary Multiplier: The Board of Directors will determine a performance
“weighting” to be applied to the Executive’s initial incentive payment calculation (as determined
based on the goals and objectives below),which weighting will be based on the Executive’s overall
annual performance as determined solely by the Board. The weighting factor will typically range
from 0.80 to 1.20, which factor is then multiplied by the executive’s initial incentive payment
calculation to determine the executive’s incentive payment.

Plan Components: The Plan has one Corporate financial performance component. Within the Corporate
component you will be measured against specific goals.

	A.	 	100% of your target bonus will be based on Corporate performance as follows.

	 	•	 	(40%) Achieve GAAP Revenue of $42.900M. Achieve GAAP Operating Profit (Loss) of
$(16.100)M. Operating Profit (Loss) includes non cash stock compensation expense.
Operating Profit (Loss) amounts are stated prior to taking account of Executive
Incentive Plan payment amounts. Payment amounts will be pro-rated between matrix
levels. No payments occur from performance below minimum matrix targets.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenue / Operating Profit (Loss) Targets	 	$38.600M	 	$40.750M	 	$42.900M	 	$45.900M	 	$48.900M
	$(12.900)M
	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%	 	 	200	%
	$(14.000)M
	 	 	90	%	 	 	100	%	 	 	110	%	 	 	120	%	 	 	150	%
	$(16.100)M
	 	 	50	%	 	 	80	%	 	 	100	%	 	 	110	%	 	 	120	%
	$(16.900)M
	 	 	0	%	 	 	50	%	 	 	80	%	 	 	90	%	 	 	90	%
	$(17.700)M
	 	 	0	%	 	 	0	%	 	 	50	%	 	 	80	%	 	 	80	%

	 	•	 	(40%) Corporate Initiatives

	 	1.	 	M&A Activity: During FY2008 identify, conduct due diligence,
close, and assimilate at least one acquisition for the corporation that is
greater than $10M in Revenue or greater than $5M in Operating Income.
	 
	 	2.	 	Oracle Implementation: Implement a company-wide ERP system by
upgrading to Oracle 11i in FY2008 from current version. A company-wide system
will help to integrate the majority of the data and processes of the
organization into a unified system and aid in the company attaining an
overarching goal of integrating the businesses more completely for operational
and strategic efficiencies.
	 
	 	3.	 	Increase International presence across all businesses: FY2008
International Revenue is equal to or greater than 45% or $19M of total revenue.
	 
	 	4.	 	During 2008 generate at least 20 non financial or administrative
press releases.

	 	•	 	(20%) MBO’s — to be agreed upon with Board of Directors.

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