Exhibit 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the
4th day of March, 2019 (“Effective Date”),  by and between FRANCINE R.
KAUFMAN (“Executive”)  and SENSEONICS, INCORPORATED  (“Company”).

 

WHEREAS, the Company wishes to continue to employ Executive as the Chief Medical
Officer of the Company and Executive wishes to serve in such capacity for the
Company and be its employee, subject to the terms and conditions of this
Agreement;

 

WHEREAS, the Company and Executive desire to set forth their respective rights
and obligations in this Agreement; and

 

WHEREAS, this Agreement has been duly approved and its execution has been duly
authorized by the Company’s  Board of Directors.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree to the following:

 

1.         Employment by the Company.

 

1.1       Position.  Subject to the terms set forth herein, the Company agrees
to employ Executive in the position of Chief Medical Officer and Executive
hereby accepts such continued employment on the terms and conditions set forth
in this Agreement.

 

1.2       Duties.  Executive will report to Tim Goodnow, Chief Executive Officer
(“CEO”), performing such duties as are normally associated with her position and
such duties as are assigned to her from time to time, subject to the oversight
and direction of the CEO.  During the term of Executive’s employment with the
Company, Executive’s  position with the Company is a full-time role, provided
that Company acknowledges and agrees that Executive intends to maintain her
current academic and clinical posts. Executive shall perform Executive’s  duties
under this Agreement primarily on a remote basis and Executive shall make such
business trips to the Corporate Headquarters and such other places as may be
necessary or advisable for the efficient operations of the Company and
performance of her duties.

 

1.3       Company Policies and Benefits. The employment relationship between the
parties shall also be subject to the Company’s personnel and other policies and
procedures as they may be interpreted, adopted, revised or deleted from time to
time in the Company’s sole discretion. Executive will be eligible to participate
on the same basis as similarly situated employees in the Company’s  benefit
plans in effect from time to time during her employment. All matters of
eligibility for coverage or benefits under any benefit plan shall be determined
in accordance with the provisions of such plan. The Company reserves the right
to change, alter,  or terminate any benefit plan in its sole discretion.
Notwithstanding the foregoing, in the event that the terms of this Agreement
differ from or are in conflict with the Company’s general employment policies or
practices, this Agreement shall control.

 

2.         Compensation.

 

 

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2.1       Salary.  Executive shall receive for Executive’s services to be
rendered under this Agreement a base salary of $495,000.00 on an annualized
basis, subject to review and adjustment by the Company in its sole discretion,
payable subject to standard federal and state payroll withholding requirements
in accordance with the Company’s standard payroll practices (“Base Salary”).

 

2.2       Bonus.  During the period Executive is employed with the Company,
Executive shall be eligible to earn for Executive’s services to be rendered
under this Agreement a discretionary annual cash bonus of up to 50% of Base
Salary (“Target Amount”), subject to review and adjustment by the Company in its
sole discretion, payable subject to standard federal and state payroll
withholding requirements. Whether or not Executive earns any bonus will be
dependent upon (a) Executive’s continuous performance of services to the Company
through the date any bonus is paid; and (b) the actual achievement by Executive
and the Company of the applicable performance targets and goals set by the Board
of Directors of the Company (“Board”). The annual period over which performance
is measured for purposes of this bonus is January 1 through December 31. The
Board will determine in its sole discretion the extent to which Executive and
the Company have achieved the performance goals upon which the bonus is based
and the amount of the bonus, which could be above or below the Target Amount
(and may be zero). Any bonus shall be subject to the terms of any applicable
incentive compensation plan adopted by the Company. Any bonus, if earned, will
be paid to Executive within the time period set forth in the incentive
compensation plan.

 

2.3       Stock Options. Subject to approval by the Board and subject to the
terms of the 2015 Equity Incentive Plan (the “Plan”), Executive will be granted
an option (the “Option”)  to purchase up to 550,000 shares of the Company’s
Common Stock pursuant to the Company’s  standard Qualified Stock Option
Agreement (to the extent permitted) and the terms of the Plan. Twenty-five (25%)
percent of the Option Shares will vest on the first anniversary of the Start
Date and the remaining seventy-five percent (75%) shall vest in equal amounts at
the end of each calendar month for the 36-month period following the first
anniversary of the Start Date, in each such case subject to Executive’s
 continuous employment through the applicable vesting date. The exercise price
of the Option will be equal to the fair market value of the Company’s Common
Stock on the date of grant of the Option, as determined by the Board in its sole
discretion. The Option will be governed by and subject to the terms and
conditions of the Plan and other documents issued in connection with the grant.

 

2.4       Expense Reimbursement. The Company will reimburse Executive for
reasonable business expenses in accordance with the Company’s  standard expense
reimbursement policy, as  the same may be modified by the Company from time to
time. The Company shall reimburse Executive for all customary and appropriate
business-related expenses actually incurred and documented in accordance with
Company policy, as in effect from time to time. For the avoidance of doubt,  to
the extent that any reimbursements payable to Executive are subject to the
provisions of Section 409A of the Code: (a) any such reimbursements will be paid
no later than December 31 of the year following the year in which the expense
was incurred,  (b) the amount of expenses reimbursed in one year will not affect
the amount eligible for reimbursement in any subsequent year, and (c) the right
to reimbursement under this Agreement will not be subject to liquidation or
exchange for another  benefit.

 

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3.         Proprietary Information, Inventions, Confidentiality and
Non-Solicitation Obligations. As a condition of employment, Executive agrees to
execute and abide by an Employee Confidential Information, Non-solicitation and
Inventions Assignment Agreement attached as Exhibit A (“Proprietary Information
Agreement”), which may be amended by the parties from time to time without
regard to this Agreement. The Proprietary Information Agreement contains
provisions that are intended by the parties to survive and do survive
termination of this Agreement.

 

4.         Outside Activities during Employment. Except with the prior written
consent of the CEO, including consent given to Executive prior to the signing of
this Agreement, and subject to the exception in Section 1.2 for Executive’s
 current academic and clinical posts, Executive will not, while employed by the
Company, undertake or engage in any other employment, occupation or business
enterprise that would interfere with Executive’s responsibilities and the
performance of Executive’s  duties hereunder except for (i) reasonable time
devoted to volunteer services for or on behalf of such religious, educational,
non-profit and/or other charitable organization as Executive may wish to serve,
(ii) reasonable time devoted to activities in the non-profit and business
communities consistent with Executive’s duties; and (iii) such other activities
as may be specifically approved by the Board. This restriction shall not,
 however, preclude Executive (x) from owning less than one percent (1%) of the
total outstanding shares of a publicly traded company, or (y) from employment or
service in any capacity with Affiliates of the Company. As used in this
Agreement, “Affiliates” means an entity under common management or control with
the Company.

 

5.         No Conflict with Existing Obligations. Executive represents that
Executive’s performance of all the terms of this Agreement does not and will not
breach any agreement or obligation of any kind made prior to Executive’s
employment by the Company,  including agreements or obligations Executive may
have with prior employers or entities for which Executive has provided services.
Executive has not entered into,  and Executive agrees that Executive will not
enter into,  any agreement or obligation, either written or oral, in conflict
herewith. As part of this obligation, Executive agrees that she is subject to a
 duty to maintain the confidentiality of confidential or proprietary information
that she has received from third parties, to hold such information in the
strictest confidence, and not to disclose it to any person or entity or use it
in carrying out Executive’s work for the Company, consistent with any agreements
between Executive and such third party or third parties.

 

6.         Termination of Employment. The parties acknowledge that Executive’s
employment relationship with the Company is at-will, meaning either the Company
or Executive may terminate Executive’s  employment at any time,  with or without
cause or advanced notice. The provisions in this Section govern the amount of
compensation, if any, to be provided to Executive upon termination of employment
and do not alter this at-will status.

 

6.1       Termination by the Company without Cause or for Good Reason.

 

(a)        The Company shall have the right to terminate Executive’s employment
with the Company pursuant to this Section 6.1 at any time, in accordance
with Section 6.6, without “Cause” (as defined in Section 6.2(b) below) by giving
 notice as described

 

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in Section 8.1 of this Agreement. A termination pursuant to Section 6.5 below is
not a termination without “Cause” for purposes of receiving the benefits
described in this Section 6.1.

 

(b)        If the Company terminates Executive’s employment at any time without
Cause or Executive terminates her employment with the Company for Good Reason
and provided that such termination constitutes a “separation from service” (as
defined under Treasury Regulation Section l.409A-l (h),  without regard to any
alternative definition thereunder, a “Separation from Service”), then Executive
shall be entitled to receive the Accrued Obligations (defined below). If
Executive complies with the obligations in Section 6.1(c) below, Executive shall
also be eligible to receive the following severance benefits: (1) an amount
equal to Executive’s then current Base Salary for nine (9) months, less all
applicable withholdings and deductions (“Severance”), paid in equal installments
beginning on the Company’s first regularly scheduled payroll date following the
Release Effective Date (as defined in Section 6.1(c) below),  with the remaining
installments occurring on the Company’s regularly scheduled payroll dates
thereafter and (2) a pro rata portion of Executive’ s Target Amount for the
performance year in which Executive’s  termination occurs, with such pro rata
portion calculated based upon the number of days that Executive was employed
during such performance year divided by the total number of days in such
performance year, payable as a lump sum payment on the Release Effective Date
(as defined below) (“Bonus Severance”).

 

(c)        Executive will be paid all of the Accrued Obligations on the
Company’s first payroll date after Executive’s date of termination from
employment or earlier if required by law. Executive shall receive the Severance
and Bonus Severance pursuant  to Section 6.1(b) of this Agreement and the
payments pursuant to Section 6.1(d) if: (i) by the 60th day following the date
of Executive’ s Separation from Service, she has signed and delivered to the
Company a separation agreement containing an effective, general release of
claims in favor of the Company and its affiliates and representatives, in a form
acceptable to the Company (the “Release”), which cannot be revoked in whole or
part  by such date (the date that the Release can no longer be revoked is
referred to as the “Release Effective Date”); and (ii) if she holds any other
positions with the Company, she resigns such position(s) to be effective no
later than the date of Executive’s termination date (or such other date as
requested by the Board); (iii) she returns all Company property; (iv) she
complies with his post-termination obligations under this Agreement and the
Proprietary Information Agreement; and (v) she complies with the terms of the
Release, including without limitation any non-disparagement  and confidentiality
provisions contained in Release. To the extent that any severance payments are
deferred compensation under Section 409A of the Code, and are not othe1wise
exempt from the application of Section 409A, then,  if the period during which
Executive may consider and sign the Release spans two calendar years, the
payment of Severance will not be made or begin until the later calendar  year.

 

(d)        If Executive timely elects continued coverage under COBRA for herself
and her covered dependents under the Company’s  group health plans following
such termination, then the Company shall pay the COBRA premiums necessary to
continue Executive’s and her covered dependents’ health insurance coverage in
effect for herself (and her covered dependents) on the termination date until
the earliest of:  (i) twelve (12) months following the termination date
(the “COBRA Severance Period”); (ii) the date when Executive becomes eligible
for substantially equivalent  health insurance coverage in connection with new
 employment or self-employment; or (iii) the date Executive ceases to be
eligible for COBRA continuation coverage

 

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for any reason, including plan termination (such period from the termination
date through the earlier of (i)-(iii), (the “COBRA Payment Period”).
Notwithstanding the foregoing,  if at any time the Company determines that its
payment of COBRA premiums on Executive’s  behalf would result in a violation of
applicable law (including, but not limited to,  the 2010 Patient Protection and
Affordable Care Act, as amended by the 2010 Health Care and Education
Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this
Section, the Company shall pay Executive on the last day of each remaining month
of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA
premium for such month, subject to applicable tax withholding (such amount,  the
“Special Severance Payment”), such Special Severance Payment to be made without
regard to the COBRA period prior to the end of the COBRA Payment Period. Nothing
in this Agreement shall deprive Executive of her rights under COBRA or ERISA for
benefits under plans and policies arising under her employment by the Company.

 

(e)        For purposes of this Agreement, “Accrued Obligations” are (i)
Executive’s  accrued but unpaid salary through the date of termination, (ii) any
unreimbursed business expenses incurred by Executive payable in accordance with
the Company’s standard expense reimbursement policies,  and (iii) benefits owed
to Executive under any qualified retirement plan or health and welfare benefit
plan in which Executive was a participant in accordance with applicable law and
the provisions of such plan.

 

(f)        The Severance and Bonus Severance provided to Executive pursuant to
this Section 6.1 are in lieu of, and not in addition to, any benefits to which
Executive may otherwise be entitled under any Company severance plan, policy or
program.

 

(g)        Any damages caused by the termination of Executive’s employment
without Cause would be difficult to ascertain; therefore, the Severance and
Bonus Severance for which Executive is eligible pursuant to Section 6.1(b) above
in exchange for the Release is agreed to by the parties as liquidated damages,
to serve as full compensation, and not a  penalty.

 

(h)        For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the following events without Executive’s  consent: (i) a
 material reduction in Executive’s Base Salary of at least 10%; (ii) a  material
breach of this Agreement by the Company; (iii) any material diminution in
Executive’s duties,  responsibilities, authority, reporting structure, status or
title, unless approved in writing by Executive; or (iv) the relocation of
Executive’s principal place of employment, without Executive’s consent,  in a
manner that lengthens her one-way commute distance by fifty (50) or more miles
from her then-current principal place of employment immediately prior to such
relocation;  provided, however, that, any such termination by Executive shall
only be deemed for Good Reason  pursuant to this definition if: (1) Executive
gives the Company written notice of her intent to terminate for Good Reason
within thirty (30) days following the first occurrence of the condition(s) that
she believes constitute(s) Good Reason, which notice shall describe such
condition(s);  (2) the Company fails to remedy such condition(s) within thirty
(30) days following receipt of the written notice (the “Cure Period”); and (3)
Executive voluntarily terminates her employment within thirty (30) days
following the end of the Cure Period.

 

(i)          Any damages caused by the termination of Executive’s employment
without Cause or for Good Reason  would be difficult to ascertain; therefore,
the payments  for

 

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which Executive is eligible pursuant to this Section 6.1 above in exchange for
the Release is agreed to by the parties as liquidated damages,  to serve as full
compensation, and not a penalty.

 

6.2       Termination by the Company without Cause or for Good Reason Following
a Change in Control.

 

(a)        If Executive’s employment by the Company is terminated by the Company
without “Cause” (and not due to Disability or death) or by Executive for Good
Reason coincident with a Change in Control (as defined below), then the Company
shall pay or provide Executive with the Accrued Obligations and all of the
benefits described in Section 6.1 above, subject to compliance with Section
6.1(c);  provided that: (i) in lieu of the bonus described in Section 6.1(b),
the Company shall pay Executive the larger of a  pro-rata amount as described in
Section 6.1(b) or 125% of the Target Amount for the performance year in which
Executive’s termination occurs,  payable as a lump sum payment on the Release
Effective Date; (ii) the severance payable under Section 6.1(b) shall be
calculated based on one year rather than nine months; and (iii) if Executive’s
 employment by the Company or any successor entity is terminated by the Company
or the successor entity without “Cause” (and not due to Disability or death)
within twelve (12) months following a  Change in Control, 100% of the then
unvested portion of the equity awards granted to Executive shall become fully
vested.

 

(b)        For purposes of this Agreement,  a  “Change in Control” means (a) any
consolidation or merger of the Company with or into any other corporation or
other entity or person, or any other corporate reorganization, other than any
such consolidation, merger or reorganization in which the stockholders of the
Company immediately prior to such consolidation, merger or reorganization,
continue to hold a majority of the voting power of the surviving entity (or, if
the surviving entity is a wholly owned subsidiary,  its parent) immediately
after such consolidation, merger or reorganization; (b) any transaction or
series of related transactions to which the Company is a party in which in
excess of fifty percent (50%) of the Company’s voting power is transferred;
 provided that the foregoing shall not include any transaction or series of
transactions principally for bona fide equity financing purposes in which cash
is received by the Company or indebtedness of the Company is cancelled or
converted or a combination thereof;  or (c) a sale, lease, exclusive license or
other disposition of all or substantially all of the assets of the Company. In
the event of any interpretation of this definition,  the Board of Directors of
the Company, upon advice of legal counsel,  shall have final and conclusive
authority, so long as such authority is exercised in good faith.
 Notwithstanding the foregoing, a Change in Control will only be deemed to occur
for purposes of this Agreement it is also meets the definition used for purposes
of Treasury Regulation Section l.409A-3(a)(5), that is, as defined under
Treasury Regulation Section l .409A-3(i)(5).

 

(c)        Any damages caused by the termination of Executive’s employment
without Cause or for Good Reason following a Change in Control would be
difficult to ascertain; therefore, the payments for which Executive is eligible
pursuant to Section 6.2 above in exchange for the Release is agreed to by the
parties as liquidated damages,  to serve as full compensation,  and not a
 penalty.

 

6.3       Termination by the Company for Cause.

 

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(a)        The Company shall have the right to terminate Executive’s employment
with the Company at any time, in accordance with Section 6.6, for Cause by
giving notice as described in Section 8.1 of this Agreement. In the event
Executive’s employment is terminated at any time for Cause, Executive will not
receive Severance, a Severance Bonus or any other severance compensation or
benefits, except that, pursuant to the Company’s  standard payroll policies, the
Company shall pay to Executive the Accrued Obligations.

 

(b)        “Cause” for termination shall mean that the Company has determined in
its sole discretion that Executive has engaged in any of the following: (i) a
material breach of any covenant or condition under this Agreement or any other
agreement between the parties; (ii) any act constituting dishonesty, fraud,
immoral or disreputable conduct; (iii) any conduct which constitutes a felony
under applicable  law;  (iv) violation of any written Company policy or any act
of misconduct; (v) refusal to follow or implement a clear and reasonable
directive of the Company; (vi) negligence or incompetence in the performance of
Executive’s duties or failure to perfom such duties in a  manner satisfactory to
the Company after the expiration of ten (10) days without cure after written
notice of such failure; or (vii) breach of fiduciary duty.

 

6.4       Resignation by Executive.

 

(a)        Executive may resign from Executive’s employment with the Company at
any time,  in accordance with Section 6.6,  by giving notice as described in
Section 8.1.

 

(b)        In the event Executive resigns from Executive’ s employment with the
Company for any reason, Executive will not receive Severance, a  Severance Bonus
or any other severance compensation or benefits, except that, pursuant to the
Company’s standard payroll policies,  the Company shall pay to Executive the
Accrued Obligations.

 

6.5       Termination by Virtue of Death or Disability of Executive.

 

(a)        In the event of Executive’s death while employed pursuant to this
Agreement,  all obligations of the parties hereunder shall terminate
immediately,  in accordance with Section 6.6, and the Company shall, pursuant to
the Company’s standard payroll policies, pay to Executive’s  legal
representatives all Accrued Obligations.

 

(b)        Subject to applicable state and federal law, the Company shall at all
times have the right,  upon written notice to Executive, and in accordance with
Section 6.6,  to terminate this Agreement based on Executive’s  Disability.
Termination by the Company of Executive’s employment based on “Disability” shall
mean termination because Executive is unable due to a physical or mental
condition to perform the essential functions of his position with or without
reasonable accommodation for 180 days in the aggregate during any twelve (12)
month period or based on the written certification by two licensed physicians of
the likely  continuation of such condition for such period. This definition
shall be interpreted and applied consistent with the  Americans with
Disabilities Act, the Family and Medical Leave Act, and other applicable law. In
the event Executive’s  employment is terminated based on Executive’s
 Disability, Executive will not receive Severance, a Severance Bonus or any
other severance compensation or benefit, except

 

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that, pursuant to the Company’s standard payroll policies, the Company shall pay
to Executive the Accrued Obligations.

 

6.6       Notice;  Effective Date of Termination.

 

(a)        Termination of Executive’s  employment pursuant to this Agreement
shall be effective on the earliest of:

 

(i)         immediately after the Company gives notice to Executive of
Executive’s  termination, with or without Cause, unless pursuant to Section
6.3(b)(vi) in which case ten (10) days after notice if not cured or unless the
Company specifies a later date, in which case, termination shall be effective as
of such later date;

 

(ii)        immediately upon the Executive’s  death;

 

(iii)       ten (10) days after the Company gives notice to Executive of
Executive’s  termination on account of Executive’s  Disability, unless the
Company specifies a later date, in which case, termination shall be effective as
of such later date, provided that Executive has not returned to the full-time
performance of Executive’s  duties prior to such date;

 

(iv)       ten (10) days after the Executive gives written notice to the Company
of Executive’s resignation, provided that the Company may set a termination date
at any time between the date of notice and the date of resignation, in which
case the Executive’s resignation shall be effective as of such other date.
Executive will receive compensation through any required notice period; or

 

(v)        for a termination for Good Reason, immediately upon Executive’s  full
satisfaction of the requirements of Section 6.l(h).

 

(b)        In the event notice of a  termination under subsections (a)(i),
(iii), (iv) and (iv) is given orally, at the other party’s  request, the party
giving notice must provide written confirmation of such notice within five (5)
business days of the request in compliance with the requirement of Section 8.1
below. In the event of a  termination for Cause or Good Reason, written
confirmation shall specify the subsection(s) of the definition of Cause or Good
Reason relied on to support the decision to terminate.

 

6.7       Cooperation with Company after Termination of Employment. Following
termination of Executive’s employment for any reason, Executive agrees to
cooperate fully with the Company in connection with its actual or contemplated
defense, prosecution,  or investigation of any claims or demands by or against
third parties, or other matters arising from events, acts, or failures to act
that occurred during the period of Executive’s employment by the Company. Such
cooperation includes, without limitation, making Executive available to the
Company upon reasonable notice, without subpoena, to provide complete, truthful
and accurate information in witness interviews, depositions and trial testimony.
 In addition, for six months after Executive’s employment with the Company ends
for any reason, Executive agrees to cooperate fully with the Company in all
matters relating to the transition of Executive’s work and responsibilities on
behalf of the Company, including, but not limited to,  any present,  prior or
subsequent relationships and the orderly transfer of any such work and
institutional knowledge to

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such other persons as may be designated by the Company. The Company will
reimburse Executive for reasonable out-of-pocket expenses Executive incurs in
connection with any such cooperation (excluding forgone wages, salary, or other
compensation) and will make reasonable efforts to accommodate Executive’s
scheduling needs.

 

6.8       Application of Section 409A. It is intended that all of the severance
payments payable under this Agreement satisfy, to the greatest extent possible,
the exemptions from the application of Section 409A of the Code and the
regulations and other guidance thereunder and any state law of similar effect
(collectively, “Section 409A”)  provided under Treasury Regulations Sections
1.409A-l(b)(4) and l.409A-l(b)(9), and this Agreement will be construed in a
manner that complies with Section 409A. If not so exempt, this Agreement (and
any definitions hereunder) will be construed in a manner that complies with
Section 409A, and incorporates by reference all required definitions and payment
terms. No severance payments will be made under this Agreement unless
Executive’s termination of employment constitutes a “separation from service”
(as defined under Treasury Regulation Section 1.409A-l(h)).  For purposes of
Section 409A (including, without limitation,  for purposes of Treasury
Regulations Section 1.409A-2(b)(2)(iii)), Executive’s  right to receive any
installment payments under this Agreement (whether severance payments or
otherwise) shall be treated as a right to receive a series of separate payments
and, accordingly, each installment payment hereunder shall at all times be
considered a separate and distinct payment. If the Company determines that the
severance benefits provided under this Agreement constitutes “deferred
compensation” under Section 409A and if Executive is a “specified employee” of
the Company,  as such term is defined in Section 409A(a)(2)(B)(i) of the Code at
the time of Executive’s  Separation from Service,  then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax consequences under
Section 409A, the timing of the Severance will be delayed as follows: on the
earlier to occur of (a) the date that is six months and one day after
Executive’s  Separation from Service, and (b) the date of Executive’s death
(such earlier date, the “Delayed Initial Payment Date”), the Company will (i)
pay to Executive a lump sum amount equal to the sum of the severance benefits
that Executive would otherwise have received through the Delayed Initial Payment
Date if the commencement of the payment of the severance benefits had not been
delayed pursuant to this Section 6.8 and (ii) commence paying the balance of the
severance benefits in accordance with the applicable payment schedule set forth
in Section 6. No interest shall be due on any amounts deferred pursuant to this
Section 6.8.

 

7.         Section 280G.

 

7.1       Anything in this Agreement to the contrary  notwithstanding, in the
event that the amount of any compensation, payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, calculated in a manner consistent with Section 280G of the Code and
the applicable regulations thereunder (the “Aggregate Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code,  then the
Aggregate Payments shall be reduced (but not below zero) so that the sum of all
of the Aggregate Payments shall be $1.00 less than the amount at which Executive
becomes subject to the excise tax imposed by Section 4999 of the Code; provided
that such reduction shall only  occur if it would result in Executive receiving
a  higher After Tax Amount (as defined below) than Executive would receive if
the Aggregate Payments were not subject to such reduction. In such event, the
Aggregate Payments shall be reduced in the

 

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following order, in each case,  in reverse chronological order beginning with
the Aggregate Payments that are to be paid the furthest in time from
consummation of the transaction that is subject to Section 280G of the Code: (1)
cash payments not subject to Section 409A of the Code; (2) cash payments subject
to Section 409A of the Code; (3) equity-based payments and acceleration; and (4)
non-cash forms of benefits; provided that in the case of all the foregoing
Aggregate Payments all amounts or payments that are not subject to calculation
under Treas. Reg. §1.280G-l, Q&A-24(b) or (c) shall be reduced before any
amounts that are subject to calculation under Treas. Reg. §l.280G-1, Q&A-24(b)
or (c).

 

7.2       For purposes of this Section 5, the “After Tax Amount” means the
amount of the Aggregate Payments less all federal, state, and local income,
 excise and employment taxes imposed on Executive as a result of Executive’s
receipt of the Aggregate Payments.  For purposes of determining the After Tax
Amount, Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for the
calendar year in which the determination is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in each
applicable state and locality, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes

 

8.         General Provisions.

 

8.1       Notices.  Any notices required hereunder to be in writing shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by electronic mail or confirmed facsimile if sent during
normal business hours of the recipient, and if not, then on the  next business
day, (c) five (5) days after having been sent by registered or certified mail,
 return receipt requested, postage prepaid,  or (d) one (1) day after deposit
with a nationally recognized overnight courier,  specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
Company at its primary office location and to Executive at either Executive’ s
address as listed on the Company payroll,  or Company-issued email address, or
at such other address as the Company or Executive may designate by ten (10) days
advance  written notice to the other.

 

8.2       Severability.  Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law,  but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable  law or rule in any
jurisdiction,  such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction,  but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal  or unenforceable provisions had never been contained herein.

 

8.3       Survival.  Provisions of this Agreement which by their terms must
survive the termination of this Agreement in order to effectuate the intent of
the parties will survive any such termination, whether by expiration of the
term, termination of Executive’s employment, or otherwise, for such period as
may be appropriate under the circumstances.

 

8.4       Waiver.  If either party should waive any breach of any provisions of
this Agreement, it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.

 

10.

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8.5       Complete Agreement. This Agreement, together with the Proprietary
Information Agreement, constitutes the entire agreement between Executive and
the Company with regard to the subject matter hereof. This Agreement is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter and supersedes any prior oral discussions or written
communications and agreements, including the Offer Letter dated [DATE]. This
Agreement is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in writing signed by Executive and an authorized officer of the
Company. The parties have entered into a separate Proprietary Information
Agreement and have or may enter into separate agreements related to equity.
These separate agreements govern other aspects of the relationship between the
parties, have or may have provisions that survive termination of Executive’s
employment under this Agreement, may be amended or superseded by the parties
without regard to this Agreement and are enforceable according to their terms
without regard to the enforcement provision of this Agreement.

 

8.6       Counterparts.  This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party,  but all of which taken together will constitute one and the same
Agreement. The parties agree that facsimile and scanned image copies of
signatures will suffice as original signatures.

 

8.7       Headings.  The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

 

8.8       Successors and Assigns. The Company shall assign this Agreement and
its rights and obligations hereunder in whole, but not in part, to any Company
or other entity with or into which the Company may hereafter merge or
consolidate or to which the Company may transfer all or substantially all of its
assets, if in any such case said Company or other entity shall by operation of
law or expressly in writing assume all obligations of the Company hereunder as
fully as if it had been originally made a patty hereto, but may not otherwise
assign this Agreement or its rights and obligations hereunder. Executive  may
not assign or transfer this Agreement or any rights or obligations hereunder,
 other than to his estate upon his death.

 

8.9       Choice of Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the laws of the State of
Maryland.

 

8.10     Dispute Resolution. The parties recognize that litigation in federal or
state courts or before federal or state administrative agencies of disputes
arising out of the Executive’s employment with the Company or out of this
Agreement, or the Executive’s  termination of employment or termination of this
Agreement, may not be in the best interests of either the Executive or the
Company, and may result in unnecessary costs, delays, complexities, and
uncertainty. The parties  agree that any dispute between the parties  arising
out of or relating to the negotiation, execution,  performance or termination of
this Agreement or the Executive’s employment, including,  but not limited to,
any claim arising out of this Agreement, claims under Title VII of the Civil
Rights Act of 1964, as amended,  the Civil Rights Act of 1991,  the
Age Discrimination in Employment Act of 1967,  the Americans with Disabilities
Act of 1990, Section 1981 of the Civil Rights  Act of 1966, as amended, the
Family Medical Leave Act,  the Executive Retirement Income Security Act, and any
similar federal, state or local law, statute, regulation, or

 

11.

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any common law doctrine,  whether that dispute arises during or after
employment,  shall be settled by binding arbitration in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association; provided however, that this dispute resolution
provision shall not apply to any separate agreements between the parties that do
not themselves specify arbitration as an exclusive remedy. The location for the
arbitration shall be the Washington, DC metropolitan area. Any award made by
such panel shall be final, binding and conclusive on the parties for all
purposes, and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. The arbitrators’ fees and expenses and
all administrative fees and expenses associated with the filing of the
arbitration shall be borne by the Company; provided however, that at the
Executive’s option, Executive may voluntarily pay up to one-half the costs and
fees. The parties acknowledge and agree that their obligations to arbitrate
under this Section survive the termination of this Agreement and continue after
the termination of the employment relationship between Executive and the
Company. The parties each further agree that the arbitration provisions of this
Agreement shall provide each party with its exclusive remedy, and each party
expressly waives any right it might have to seek redress in any other forum,
except as otherwise expressly provided in this Agreement. By election
arbitration as the means for final settlement of all claims, the parties hereby
waive their respective rights to, and agree not to, sue each other in any action
in a Federal, State or local court with respect to such claims, but may seek to
enforce in court an arbitration award rendered pursuant to this Agreement. The
parties specifically agree to waive their respective rights to a trial by jury,
and further agree that no demand, request or motion will be made for trial by
jury.

 

[SIGNATURES TO FOLLOW ON NEXT PAGE]

 

 

 

12.

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IN WITNESS WHEREOF,  the parties have duly executed this Agreement as of the
date first above written.

 

 

 

 

 

SENSEONICS, INCORPORATED

 

 

 

 

 

By:

/s/ Tim Goodnow

 

 

Tim Goodnow, Ph.D.

 

 

President & Chief Executive Officer

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

/s/ Francine R. Kaufman

 

 

Francine R. Kaufman, M.D.

 

 

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