Exhibit 10.3

 

SIENTRA, INC.

 

EMPLOYMENT AGREEMENT

 

Jeffrey M. Nugent

 

This Executive Employment Agreement (the “Agreement”), made between
Sientra, Inc. (the “Company”) and Jeffrey M. Nugent (“Executive”) (collectively,
the “Parties”), is effective as of November 12, 2015 (the “Effective Date”).

 

WHEREAS, the Company desires to employ Executive, pursuant to the terms,
provisions and conditions set forth in this Agreement; and

 

WHEREAS, Executive desires to accept and continue his employment on the terms,
provisions and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants herein
contained, the Parties hereby agree as follows:

 

1.             Duties and Responsibilities.

 

1.1          Position.  Executive shall serve as the Company’s Chairman and
Chief Executive Officer. During the term of Executive’s employment with the
Company, Executive will devote Executive’s diligent efforts and substantially
all of Executive’s business time and attention to the business of the Company,
except for approved vacation periods and reasonable periods of illness or other
incapacities permitted by the Company’s general employment policies.  During the
Employment Period (as defined below) executive shall serve as a member of the
Board and as its Chairman, and the Board shall nominate Executive to stand for
reelection, subject to election by the Company’s stockholders in accordance with
the Company’s Certificate of Incorporation and Bylaws.  During the Employment
Period, Executive shall not be paid a fee for serving as a member of the Board.
The Company shall reimburse Executive for reasonable expenses incurred by
Executive in connection with his service as a member of the Board in accordance
with the Company’s expense reimbursement policies.

 

1.2          Duties and Location.  Executive shall perform such duties as are
required by the Company’s Board of Directors (the “Board”), to whom Executive
will report.  Executive’s primary office location shall be the Company’s Santa
Barbara office.  The Company reserves the right to reasonably require Executive
to perform Executive’s duties at places other than Executive’s primary office
location from time to time, and to require reasonable business travel. 
Executive shall devote substantially all of Executive’s business time and
attention to the performance of Executive’s duties hereunder and shall not
engage in any other business, profession or occupation for compensation or
otherwise that would conflict or interfere with the rendition of such services,
either directly or indirectly; provided that nothing in this Agreement shall
preclude Executive from (i) managing personal investments, (ii) serving on civic
or charitable boards or committees, (iii) engaging in business or professional
activities for compensation from a third party, for 40 or fewer hours per
calendar year, so long as such activities do not compete with the Company, and
(iv) with the prior approval from the Board (not to be unreasonably withheld or
delayed) serving on the board of directors of one other for-profit company that
does not compete with the Company, so long as all such activities described in
clauses (i) through (iv) herein do not materially interfere with the performance
of Executive’s duties and responsibilities under this Agreement.  Executive has
provided to the Board a written list of all boards of directors (whether
for-profit or non-profit) of which he is a member.

 

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1.3          Policies and Procedures.  The employment relationship between the
Parties shall be governed by the general employment policies and practices of
the Company, except that when 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.

 

2.1          Salary.  As of the Effective Date, Executive’s current base salary
shall be payable at the annualized rate of $600,000.00 per year (the “Base
Salary”), subject to standard payroll deductions and withholdings and payable in
accordance with the Company’s regular payroll schedule.  The Base Salary may be
increased in the sole and absolute discretion of the Board but may not be
decreased during the Employment Period. In the event of any increase as
permitted by this Section 2, the Base Salary for all purposes under this
Agreement shall be the increased amount in effect from time to time.

 

2.2          Bonus.  Executive shall be provided with a signing bonus of
$100,000 within thirty (30) days following the Effective Date.  For each full
calendar year during the Employment Period, Executive shall be eligible for an
annual discretionary bonus of up to 75% of Executive’s Base Salary (the “Target
Bonus”), with the actual bonus amount (the “Annual Bonus”) determined by the
Compensation Committee of the Board (the “Committee”) and communicated in
writing to Executive, which Annual Bonus shall be based upon the achievement of
specific performance goals as established by the Committee in good faith
consultation with the Executive, and the Annual Bonus for the 2016 calendar year
shall be established no later than March 1, 2016.  For the partial 2015 calendar
year, Executive shall be eligible for a discretionary performance-based bonus of
up to $50,000.00, based on the Board’s evaluation of his performance during such
time period. Except as otherwise set forth above, whether Executive receives an
Annual Bonus for any given year, and the amount of any such Annual Bonus, will
be determined by the Committee in its sole discretion based upon the Company’s
and Executive’s achievement of objectives and milestones to be determined on an
annual basis by the Committee in good faith consultation with the Executive. 
Executive must remain an active employee through the end of any given calendar
year in order to earn an Annual Bonus for that year and any such bonus will be
paid prior to February 15 of the year following the year in which Executive’s
right to such amount became vested.  Executive will not be eligible for, and
will not earn, any Annual Bonus (including a prorated bonus) if Executive’s
employment terminates for any reason before the end of the calendar year, except
as expressly contemplated in Section 6 below.

 

2.3          Equity Award.  Subject to the approval of the Board, (i) concurrent
with the Effective Date, Executive shall be granted (A) a nonqualified stock
option to purchase 621,931 shares of the Company’s common stock at a per share
exercise price equal to the fair market value (as determined based on the terms
of the equity plan pursuant to which it is granted) of the Company’s common
stock on the grant date and with a ten (10) year term, and (B) a restricted
stock unit award covering 17,993 shares of the Company’s common stock, and
(ii) on January 1, 2016, Executive shall be granted an additional nonqualified
stock option to purchase 241,753 shares of the Company’s common stock at a per
share exercise price equal to the fair market value (as determined based on the
terms of the equity plan pursuant to which it is granted) of the Company’s
common stock on the grant date and with a ten (10) year term.  The stock options
shall vest in equal monthly installments over a forty-eight (48) month period
commencing on the first month anniversary of the Effective Date and the
restricted stock units shall vest in equal three (3) month installments over a
forty-eight (48) month period commencing on the three (3) month anniversary of
the Effective Date. The options and restricted stock units shall be governed by
the Company’s standard form of stock option agreement and restricted stock unit
agreement, respectively, and subject to the terms and conditions of this
Agreement.

 

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3.             Company Benefits.  Executive shall be entitled to participate in
all employee benefit programs for which Executive is eligible under the terms
and conditions of the benefit plans that may be in effect from time to time and
provided by the Company to its senior executive employees, provided that such
benefits shall be made available on the Effective Date without regard to any
waiting period, to the extent permitted by the terms of the benefit plans and
applicable law.  The Company reserves the right to cancel or change the benefit
plans or programs it offers to its employees at any time. Executive and the
Company shall enter into the Company’s standard Indemnification Agreement, which
Indemnification Agreement shall be effective as of the Effective Date.  The
Company shall reimburse Executive for any necessary and reasonable,
out-of-pocket Relocation Expenses (as defined below) that are actually incurred
by Executive. For purposes of this Section 3, “Relocation Expenses” shall mean
(i) travel, lodging, and meal expenses for Executive and his spouse and children
for house hunting trips or relocation to Executive’s new principal residence,
(ii) expenses for moving the household goods, personal effects, and automobiles
of Executive and his spouse and children from Executive’s current principal
residence to his residence located near the Company, and (iii) brokerage
commission expenses incurred by Executive in connection with the sale of
Executive’s current principal residence, provided the expenses described in
clause (i), (ii) or (iii) are directly related to the establishment of
Executive’s residence located near the Company in connection with Executive’s
employment with the Company, and such Relocation Expenses shall be reimbursed
only if incurred by Executive not later than December 31, 2016.  The Company
shall pay such reimbursements and other payments upon presentation of an
itemized account and appropriate supporting documentation in accordance with the
Company’s expense reimbursement procedures.  In addition, the Company agrees to
promptly reimburse Executive for the reasonable legal fees incurred by Executive
in the preparation and negotiation of this Agreement.

 

4.             Paid Time Off.  Executive shall be entitled to accrue and use
paid time off in accordance with the terms of the Company’s policies and
practices, provided, however, that in no event will Executive’s vacation accrual
rate be lower than twenty (20) days per year.

 

5.             Expenses.  The Company will reimburse Executive for reasonable
and normal airfare, car rental, travel, local transportation, entertainment, or
other expenses incurred by Executive in furtherance or in connection with the
performance of Executive’s duties hereunder, in accordance with the Company’s
expense reimbursement policy as in effect from time to time.

 

6.             Termination of Employment; Severance.

 

6.1          At-Will Employment.  Executive’s employment relationship is
at-will.  Either Executive or the Company may terminate the employment
relationship at any time, with or without Cause or advance notice.  The period
during which Executive’s employment continues in effect shall be referenced as
the “Employment Period.”

 

6.2          Termination for Cause; Resignation; Death or Disability.

 

(a)                           The Company may terminate Executive’s employment
with the Company at any time for Cause (as defined below).  Further, Executive
may resign at any time, with or without Good Reason (as defined below). 
Executive’s employment with the Company may also be terminated due to
Executive’s death or disability.

 

(b)                           If Executive resigns for any reason, except as
provided in Section 6.4 below, or the Company terminates Executive’s employment
for Cause, or upon Executive’s death or disability, then (i) Executive will no
longer vest in any equity awards, (ii) all payments of

 

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compensation by the Company to Executive hereunder will terminate immediately
(except as to amounts already earned), and (iii) Executive will not be entitled
to any severance benefits.  In addition, Executive shall resign from all
positions and terminate any relationships as an employee, advisor, officer or
director with the Company and any of its affiliates, each effective on the date
of termination.

 

6.3          Termination without Cause.  In the event Executive’s employment
with the Company is terminated by the Company without Cause (and other than as
result of death or disability) prior to the closing of a Change in Control (as
defined below) or more than twelve (12) months following the closing of a Change
of Control, then provided such termination constitutes a “separation from
service” (as defined under Treasury Regulation Section 1.409A-1(h), without
regard to any alternative definition thereunder, a “Separation from Service”),
and provided that Executive remains in compliance with the terms of this
Agreement, the Company shall provide Executive with the following severance
benefits (collectively, the “Severance Benefits”):

 

(a)           (X) in the event of a termination by the Company without Cause on
or prior to the two-year anniversary of the Effective Date, the Company shall
pay Executive (i) an amount equal to (twenty-four) 24 months of Executive’s
then-current Base Salary paid in a lump sum, plus (ii) a lump sum amount equal
to two (2) times the Annual Bonus, earned by Executive in connection with
completion of the fiscal year prior to Executive’s Separation from Service, or
(Y) in the event of a termination by the Company without Cause after the
two-year anniversary of the Effective Date, the Company shall pay Executive
(i) an amount equal to (twelve) 12 months of Executive’s then-current Base
Salary paid in a lump sum, plus (ii) a lump sum amount equal to the Annual
Bonus, earned by Executive in connection with completion of the fiscal year
prior to Executive’s Separation from Service.

 

(b)           Provided that Executive timely elects continued coverage under
COBRA, the Company shall pay Executive’s COBRA premiums to continue Executive’s
coverage (including coverage for eligible dependents, if applicable) (“COBRA
Premiums”) through the period (the “COBRA Premium Period”) starting on the
Executive’s Separation from Service and ending on the earliest to occur of:
(i) eighteen (18) months following Executive’s Separation from Service; (ii) the
date Executive becomes eligible for group health insurance coverage through a
new employer; or (iii) the date Executive ceases to be eligible for COBRA
continuation coverage for any reason, including plan termination.  In the event
Executive becomes covered under another employer’s group health plan or
otherwise cease to be eligible for COBRA during the COBRA Premium Period,
Executive must immediately notify the Company of such event.  Notwithstanding
the foregoing, if the Company determines, in its sole discretion, that it cannot
pay the COBRA Premiums without a substantial risk of violating applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof provide to Executive a taxable monthly payment
in an amount equal to the monthly COBRA premium that Executive would be required
to pay to continue Executive’s group health coverage in effect on the date of
Executive’s employment termination (which amount shall be based on the premium
for the first month of COBRA coverage), which payments shall be made on the last
day of each month regardless of whether Executive elects COBRA continuation
coverage and shall end on the earlier of (x) the date upon which Executive
obtains other employment or (y) the last day of the 18th calendar month
following Executive’s Separation from Service date.

 

(c)           In the event of a termination by the Company without Cause (i) on
or prior to the two-year anniversary of the Effective Date, the Company shall
accelerate the vesting of that portion of all then-unvested Company equity
awards granted to Executive that would have vested over the 12-month period
following the date of Executive’s Separation from Service; or (ii) following the
two-year anniversary of the Effective Date, the Company shall accelerate the
vesting of that portion of all then-unvested Company equity awards granted to
Executive such that all of Executive’s then-outstanding

 

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unvested Company equity awards shall be deemed vested and exercisable as of
Executive’s Separation from Service date.

 

6.4          Change in Control.

 

(a)           If the Company terminates Executive’s employment with the Company
without Cause, or Executive resigns for Good Reason, in either case on or within
twelve (12) months following the closing of a Change in Control (as defined
below), and such termination represents a Separation from Service, then
Executive shall be entitled to the Severance Benefits as set forth in
Section 6.3.

 

(b)           In addition, if an acquiror does not assume or continue
Executive’s then-unvested Company equity awards in connection with a Change in
Control that also represents a Corporate Transaction (as defined in the
Company’s 2014 Equity Incentive Plan), then all such awards shall accelerate in
full and will be deemed vested and exercisable as of the closing of the
Corporate Transaction.

 

7.             Conditions to Receipt of Severance Benefits.  The receipt of the
Severance Benefits provided in Section 6.3 and Section 6.4 above, as applicable,
will be subject to Executive signing and not revoking within the permitted
timeframe a separation agreement and release of claims with the release of
claims in substantially the form set forth on Exhibit A hereto (the “Separation
and Release Agreement”) within the time period set forth therein, which shall
not exceed fifty (50) days from the date of Executive’s Separation from Service
(the “Release Period”).  No Severance Benefits will be paid or provided until
the Separation and Release Agreement becomes effective.  If the Release Period
described in the preceding sentence spans two calendar years, then payment of
Severance Benefits will in any event commence in the second calendar year to the
extent required to comply with Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”).  Executive shall also resign from all
positions and terminate any relationships as an employee, advisor, officer or
director with the Company and any of its affiliates, each effective on the date
of termination.

 

8.             Section 409A.   It is intended that all of the severance benefits
and other payments payable under this Agreement satisfy, to the greatest extent
possible, the exemptions from the application of Section 409A provided under
Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this
Agreement will be construed to the greatest extent possible as consistent with
those provisions, and to the extent no so exempt, this Agreement (and any
definitions hereunder) will be construed in a manner that complies with
Section 409A.  For purposes of Section 409A (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right
to receive any installment payments under this Agreement (whether severance
payments, reimbursements 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. 
Notwithstanding any provision to the contrary in this Agreement, if Executive is
deemed by the Company at the time of Executive’s Separation from Service to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i), and if any of the
payments upon Separation from Service set forth herein and/or under any other
agreement with the Company are deemed to be “deferred compensation”, then to the
extent delayed commencement of any portion of such payments is required in order
to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the
related adverse taxation under Section 409A, such payments shall not be provided
to Executive prior to the earliest of (i) the expiration of the six-month period
measured from the date of Executive’s Separation from Service with the Company,
(ii) the date of Executive’s death or (iii) such earlier date as permitted under
Section 409A without the imposition of adverse taxation.  Upon the first
business day following the expiration of such time period, all payments

 

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deferred pursuant to this Paragraph shall be paid in a lump sum to Executive,
and any remaining payments due shall be paid as otherwise provided herein or in
the applicable agreement. No interest shall be due on any amounts so deferred.

 

9.             Parachute Payments.  If any payment or benefit (including
payments and benefits pursuant to this Agreement) that Executive would receive
in connection with a Change in Control from the Company or otherwise
(“Transaction Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be
determined, before any amounts of the Transaction Payment are paid to Executive,
which of the following two alternative forms of payment would result in
Executive’s receipt, on an after-tax basis, of the greater amount of the
Transaction Payment notwithstanding that all or some portion of the Transaction
Payment may be subject to the Excise Tax: (1) payment in full of the entire
amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a
part of the Transaction Payment so that Executive receives the largest payment
possible without the imposition of the Excise Tax (a “Reduced Payment”). For
purposes of determining whether to make a Full Payment or a Reduced Payment, the
Company shall cause to be taken into account all applicable federal, state and
local income and employment taxes and the Excise Tax (all computed at the
highest applicable marginal rate, net of the maximum reduction in federal income
taxes which could be obtained from a deduction of such state and local taxes).
If a Reduced Payment is made, (x) Executive shall have no rights to any
additional payments and/or benefits constituting the Transaction Payment, and
(y) reduction in payments and/or benefits shall occur in the manner that results
in the greatest economic benefit to Executive as determined in this paragraph.
If more than one method of reduction will result in the same economic benefit,
the portions of the Transaction Payment shall be reduced pro rata. Unless
Executive and the Company otherwise agree in writing, any determination required
under this section shall be made in writing by the Company’s independent public
accountants (the “Accountants”), whose determination shall be conclusive and
binding upon Executive and the Company for all purposes. For purposes of making
the calculations required by this section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. Executive and the Company shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this section as well as any costs incurred by
Executive with the Accountants for tax planning under Sections 280G and 4999 of
the Code.

 

10.          Definitions.

 

10.1        Cause.  For purposes of this Agreement, “Cause” for termination will
mean:  (a) Executive’s willful and continued failure substantially to perform
his duties and responsibilities to the Company hereunder in accordance with the
lawful instructions of the Board, or a willful, material violation of a material
policy of the Company that has caused or is reasonably expected to result in
material injury to the Company, in either case which, if curable, Executive
fails to cure within thirty (30) business days following written notice from the
Board; (b) Executive’s commission of any act of fraud, embezzlement, dishonesty
or any other willful misconduct that has caused or is reasonably expected to
result in material injury to the Company; (c) Executive’s willful breach of any
of his obligations under any written agreement or covenant with the Company,
which, if curable, Executive fails to cure within thirty (30) business days
following written notice from the Board; or (d) Executive’s material and willful
violation of a federal or state law or regulation applicable to the business of
the Company that has caused or is reasonably expected to result in material
injury to the Company.

 

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10.2        Change in Control.  For purposes of this Agreement, “Change in
Control” shall have the meaning provided in the Company’s 2014 Equity Incentive
Plan.

 

10.3        Corporate Transaction.  For purposes of this Agreement, “Corporate
Transaction” shall have the meaning provided in the Company’s 2014 Equity
Incentive Plan.

 

10.4        Good Reason.  For purposes of this Agreement, Executive shall have
“Good Reason” for resignation from employment with the Company if any of the
following actions are taken by the Company without Executive’s affirmative prior
written consent to such adverse change (which specifically acknowledges
Executive’s waiver of the Good Reason condition with respect to the individual
action that would otherwise form the basis of a resignation for Good Reason): 
(a) a material reduction in Executive’s base salary, bonus opportunity or
benefits; (b) a material reduction in Executive’s title, duties,
responsibilities and/or authority; or (c) relocation of Executive’s principal
place of employment to a place other than Santa Barbara, California.  In order
to resign for Good Reason, Executive must provide written notice to the Board
within thirty (30) days after the first occurrence of the event giving rise to
Good Reason setting forth the basis for Executive’s resignation, allow the
Company at least thirty (30) days from receipt of such written notice to cure
such event, and if such event is not reasonably cured within such period,
Executive must resign from all positions Executive then holds with the Company
not later than sixty (60) days after the expiration of the cure period.

 

11.          Proprietary Information Obligations. Regardless of the reason of
Executive’s termination of employment with the Company, Executive will continue
to comply with the Employee Confidentiality, Inventions and Non-Interference
Agreement dated as of the Effective Date (the “Confidentiality Agreement”).

 

12.          No Adverse Interests.  Executive agrees not to intentionally or
knowingly acquire, assume or participate in, directly or indirectly, any
position, investment or interest known by Executive to be adverse or
antagonistic to the Company, its business or prospects, financial or otherwise.

 

13.          Non-Solicitation.  Executive agree that during the period of
employment with the Company and for twelve (12) months after the date
Executive’s employment is terminated for any reason, Executive will not, either
directly or through others, solicit or encourage or attempt to solicit or
encourage any employee, independent contractor, or consultant of the Company to
terminate his or her relationship with the Company in order to become an
employee, consultant or independent contractor to or for any other person or
entity.

 

14.          Dispute Resolution.  To ensure the timely and economical resolution
of disputes that may arise in connection with Executive’s employment with the
Company, Executive and the Company agree that any and all disputes, claims, or
causes of action arising from or relating to the enforcement, breach,
performance, negotiation, execution, or interpretation of this Agreement,
Executive’s employment, or the termination of Executive’s employment, including
but not limited to statutory claims, shall be resolved to the fullest extent
permitted by law by final, binding and confidential arbitration, by a single
arbitrator, in Los Angeles, California, conducted by JAMS, Inc. (“JAMS”) under
the then applicable JAMS rules (which can be found at the following web address:
http://www.jamsadr.com/rulesclauses).  By agreeing to this arbitration
procedure, both Executive and the Company waive the right to resolve any such
dispute through a trial by jury or judge or administrative proceeding.  The
Company acknowledges that Executive will have the right to be represented by
legal counsel at any arbitration proceeding.  The arbitrator shall:  (a) have
the authority to compel adequate discovery for the resolution of the dispute and
to award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award.  The Company will pay the arbitrator’s
fees and any other fees,

 

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costs or expenses unique to arbitration, including the filing fee, the fees and
costs of the arbitrator, and rental of a room to hold the arbitration hearing.
However, if Executive is the party initiating the claim, Executive shall be
responsible for contributing an amount equal to the filing fee to initiate a
claim in the court of general jurisdiction in the State of California. The
Arbitrator shall award reasonable legal fees and/or costs to the prevailing
party in any dispute subject to arbitration under this Agreement, to the extent
permitted by applicable law.  Nothing in this Agreement is intended to prevent
either Executive or the Company from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any such arbitration.  Any
awards or orders in such arbitrations may be entered and enforced as judgments
in the federal and state courts of any competent jurisdiction.

 

15.          General Provisions.

 

15.1        Notices.  Any notices provided must be in writing and will be deemed
effective upon the earlier of personal delivery (including personal delivery by
fax) or the next day after sending by overnight carrier, to the Company at its
primary office location and to Executive at the address as listed on the Company
payroll.

 

15.2        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 to the extent possible in
keeping with the intent of the parties.

 

15.3        Waiver.  Any waiver of any breach of any provisions of this
Agreement must be in writing to be effective, and it shall not thereby be deemed
to have waived any preceding or succeeding breach of the same or any other
provision of this Agreement.

 

15.4        Complete Agreement.  This Agreement, together with the
Confidentiality Agreement and the Indemnification Agreement, constitutes the
entire agreement between Executive and the Company with regard to this subject
matter.  It supersedes all previous agreements and understandings between the
parties with respect to the subject matter hereof and is the complete, final,
and exclusive embodiment of the Parties’ agreement with regard to this subject
matter.  This Agreement is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein,
and it supersedes any other such promises, warranties or representations.  This
Agreement cannot be modified or amended except in a writing signed by a duly
authorized officer of the Company.

 

15.5        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.

 

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

 

15.7        Successors and Assigns.  This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.

 

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15.8        Tax Withholding and Indemnification.  All payments and awards
contemplated or made pursuant to this Agreement will be subject to withholdings
of applicable taxes in compliance with all relevant laws and regulations of all
appropriate government authorities.  Executive acknowledges and agrees that the
Company has neither made any assurances nor any guarantees concerning the tax
treatment of any payments or awards contemplated by or made pursuant to this
Agreement.  Executive has had the opportunity to retain a tax and financial
advisor and fully understands the tax and economic consequences of all payments
and awards made pursuant to the Agreement.

 

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

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first written above.

 

 

SIENTRA, INC.

 

 

 

 

 

By:

/s/ Nicholas Simon

 

 

Name: Nicholas Simon

 

 

On behalf of the Board of Directors

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

/s/ Jeffrey M. Nugent

 

Jeffrey M. Nugent

 

[Signature Page to Employment Agreement — Jeffrey Nugent]

 

1

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EXHIBIT A

 

  , 20

 

Jeffrey M. Nugent

Address: last address on file with the Company

 

RE:  Separation Agreement

 

Dear Jeffrey,

 

This letter sets forth the terms and conditions of our agreement (the
“Agreement”) regarding the separation of your employment with Sientra, Inc. (the
“Company”).  This Agreement will become effective on the “Effective Date” as
defined in Section 11 herein.  You and the Company hereby agree as follows:

 

1.             SEPARATION.  You have submitted and the Company has accepted your
resignation from the Company, including any and all positions and offices held
by you, effective          , 20   (the “Separation Date”).

 

2.             SEPARATION BENEFITS.  In exchange for your covenants and releases
herein, and provided that this Agreement becomes effective as specified in
Section 11 below, the Company will provide you with the following separation
benefits (collectively, the “Separation Benefits”), which are equivalent in
amount to those described in Section     (1) of the Employment Agreement between
you and the Company effective November    , 2015 (the “Employment Agreement”).

 

(a)           [reserved]

 

(b)           [reserved]

 

(c)           Tax Withholding. All compensation described in this Section 2 will
be subject to the Company’s collection of all applicable federal, state and
local income and employment withholding taxes.

 

(d)           Final Expense Report. You will have thirty (30) days from the
Separation Date to submit a final expense report for business expenses incurred
through the Separation Date.  Reimbursement for such expenses will be made to
you within five (5) days after receipt of the expense report.

 

3.             OTHER COMPENSATION AND BENEFITS.  Except as expressly provided
herein or pursuant to the terms of any plan providing for retirement benefits,
including, without limitation, any 401(k) plan, sponsored by the Company for
your benefit, you acknowledge and agree that you are not entitled to and will
not receive any additional compensation, wages, reimbursement, severance, or
benefits from the Company.

 

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(1)  Relevant section number to be included based on type and timing of
termination.  Actual benefits to be paid/provided will reflect the wording in
the relevant section of the employment agreement (e.g. with respect to any cash
payments, COBRA, and equity vesting).

 

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Jeffrey M. Nugent

                           2015

Page Two

 

4.             TERMINATION OF THE COMPANY’S OBLIGATIONS.  Notwithstanding any
provisions in this Agreement to the contrary and except as consented to above,
the Company’s obligations hereunder shall cease and be rendered a nullity
immediately should you fail to comply with any of the provisions of this
Agreement.

 

5.             COMPANY PROPERTY.  You represent and confirm that no later than
          , 20   you will return to the Company all Company documents (and all
copies thereof) and other property of the Company in your possession or control,
including, but not limited to, computer security access, files, business plans,
notes, financial information, financial information, data, computer-recorded
information, tangible property, including entry cards, keys and any other
materials of any nature pertaining to your work with the Company, and any
documents or data of any description (or any reproduction of any documents or
data) containing or pertaining to any proprietary or confidential material of
the Company; provided that you shall be permitted to retain copies of documents
relating to the terms and conditions of your employment with the Company (for
example, copies of Stock Option Agreements).

 

6.             CONFIDENTIAL INFORMATION AND PROPRIETARY INFORMATION
OBLIGATIONS.  You acknowledge signing the Company’s Confidentiality, Inventions
and Non-Interference Agreement (the “CINA”) containing a confidentiality
agreement in connection with your employment with the Company.  You represent
that you have complied with and will continue to comply with the terms of the
CINA.

 

7.             NON-DISPARAGEMENT; INQUIRIES.   For three years following the
Effective Date, you shall not make any disparaging comments or statements about
the Company, its services, its products, its work, the members of its Board of
Directors (the “Board”), or executive management.  The Company will follow its
standard neutral reference policy in response to any inquiries regarding you
from prospective employers, i.e., only dates of employment and position(s) held
will be disclosed.  The Company agrees, for three years following the Effective
Date, to direct the members of the Board and executive officers of the Company
not to make any disparaging comments about you, your professional capabilities
or your service to the Company.  Nothing in this Agreement shall preclude you or
the Company (or its employees, officers, directors, or agents) from responding
accurately and fully to any question, inquiry or request for information when
required by legal process.

 

8.             COOPERATION AND ASSISTANCE.  You agree that you will not
voluntarily provide assistance, information, encouragement, or advice, directly
or indirectly (including through agents or attorneys), to any person or entity
in connection with any claim by or against the Company, nor shall you induce or
encourage any person or entity to do so.  The foregoing sentence shall not
prohibit you from testifying truthfully under subpoena.  You warrant that you
have not previously provided assistance, information, encouragement, or advice,
directly or indirectly, to any person or entity in connection with any claim by
or against the Company.  You agree to provide (voluntarily and without legal
compulsion) prompt cooperation and accurate and complete information to the
Company in the event of litigation involving the Company or its

 

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Jeffrey M. Nugent

                           2015

Page Three

 

officers or directors and to respect and preserve all privileges held by or
available to the Company.  The Company agrees to compensate you for your time
spent consulting with and traveling to any litigation-related proceeding at a
reasonable the rate to be agreed between you and the Company plus reimbursement
of reasonable travel costs.

 

9.             INJUNCTIVE RELIEF.  The parties agree that any remedy at law will
be inadequate for any breach by you or the Company of the covenants under
Sections 6, 7, and 8 of this Agreement, and that each party shall be entitled to
an injunction both preliminary and final, and any other appropriate equitable
relief to enforce her or its rights set forth in these Sections.  Such remedies
shall be cumulative and non-exclusive, being in addition to any and all other
remedies either party may have.

 

10.          RELEASE OF CLAIMS.

 

(a)           General Release.  In exchange for the consideration provided to
you under this Agreement to which you would not otherwise be entitled, including
but not limited to the Separation Benefits, you hereby generally and completely
release the Company and its current and former directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, investors and assigns (collectively,
the “Released Parties”) of and from any and all claims, liabilities and
obligations, both known and known, that arise out of or are in any way related
to events, acts, conduct, or omissions occurring prior to or on the date you
sign this Agreement (collectively, the “Released Claims”).

 

(b)           Scope of Release.  The Released Claims include, but are not
limited to: (i) all claims arising out of or in any way related to your
employment with the Company, the Employment Agreement, or the termination of
your employment: (ii) all claims related to your compensation or benefits from
the Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company: (iii) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good faith
and fair dealing; (iv) all tort claims, including claims for fraud, defamation,
emotional distress, wrongful termination, and discharge in violation of public
policy; and (v) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the Age Discrimination in Employment
Act (“ADEA”), the federal Family and Medical Leave Act (as amended) (“FMLA”),
the California Family Rights Act (“CFRA”), the California Labor Code (as
amended), the California Unruh Act, and the California Fair Employment and
Housing Act (as amended).

 

(c)           Excluded Claims.  Notwithstanding the foregoing, the following are
not included in the Released Claims (the “Excluded Claims”): (i) any rights or
claims for indemnification you may have pursuant to any written indemnification
agreement with the Company to which you are a party, the charter, bylaws, or
operating agreements of the Company, or under applicable law; (ii) any rights or
claims which are not waivable as a matter of law; (iii) any rights under the
Company’s equity plans and award agreements granted thereunder;

 

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Jeffrey M. Nugent

                           2015

Page Four

 

and (iv) any claims for breach of this Agreement.  In addition, nothing in this
Agreement prevents you from filing, cooperating with, or participating in any
proceeding before the Equal Employment Opportunity Commission, the Department of
Labor, the California Department of Fair Employment and Housing, or any other
government agency, except that you acknowledge and agree that you hereby waive
your right to any monetary benefits in connection with any such claim, charge or
proceeding.  You represent and warrant that, other than the Excluded Claims, you
are not aware of any claims you have or might have against any of the Released
Parties that are not included in the Released Claims.

 

(d)           Acknowledgements.  You acknowledge that (i) the consideration
given to you in exchange for the waiver and release in this Agreement is in
addition to anything of value to which you were already entitled; (ii) that you
have been paid for all time worked, have received all the leave, leaves of
absence and leave benefits and protections for which you are eligible, and have
not suffered any on-the-job injury for which you have not already filed a claim;
(iii) you have been given sufficient time to consider this Agreement and to
consult an attorney or advisor of your choosing; and (iv) you are knowingly and
voluntarily executing this Agreement waiving and releasing any claims you may
have as of the date you execute it.

 

(e)           The Company, on behalf of itself, and each of its parents,
subsidiaries and affiliates, and each of them, hereby covenants not to sue you
and fully releases and discharges you, your descendants, dependents, heirs,
executors, administrators, assigns, and successors with respect to and from any
and all claims, demands, rights, liens, agreements or contracts (written or
oral), covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys’ fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, to the extent known by the
Company or any member of the Board as of the Separation Date (each, a “Claim”)
(including, without limitation, any Claim arising out of or in any way connected
with your service as an officer, director, or employee of Company, or any other
transactions, occurrences, acts or omissions or any loss, damage or injury
whatever), resulting from any act or omission by or on the part of you,
committed or omitted prior to the date of Company’s execution of this Agreement.

 

11.          ADEA WAIVER.  You knowingly and voluntarily waive and release any
rights you may have under the ADEA (defined above).  You also acknowledge that
the consideration given for your releases in this Agreement is in addition to
anything of value to which you were already entitled.  You are advised by this
writing that:  (a) your waiver and release do not apply to any claims that may
arise after you sign this Agreement; (b) you should consult with an attorney
prior to executing this release (and you have done so); (c) you have twenty-one
(21) days within which to consider this release (although you may choose to
voluntarily execute this release earlier); (d) you have seven (7) days following
the execution of this release to revoke this Agreement; and (e) this Agreement
will not be effective until the eighth day after you sign this Agreement,
provided that you have not earlier revoked this Agreement (the “Effective
Date”).  You will not be entitled to receive any of the benefits specified by
this Agreement unless and until it becomes effective.

 

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Jeffrey M. Nugent

                           2015

Page Five

 

12.          SECTION 1542 WAIVER.  In giving the applicable releases set forth
herein, which include claims which may be unknown at present, each party
acknowledges that you or it have or has read and understand(s) Section 1542 of
the Civil Code of the State of California which reads as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

Each party expressly waives and relinquishes all rights and benefits under this
section and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.

 

13.          NO ADMISSIONS.  The parties hereto hereby acknowledge that this is
a compromise settlement of various matters, and that the promised payments in
consideration of this Agreement shall not be construed to be an admission of any
liability or obligation by either party to the other party or to any other
person whomsoever.

 

14.          ENTIRE AGREEMENT.  This Agreement constitutes the complete, final
and exclusive embodiment of the entire Agreement between you and the Company
with regard to the subject matter hereof.  It is entered into without reliance
on any promise or representation, written or oral, other than those expressly
contained herein.  It may not be modified except in writing signed by you and
the Chairman of the Board of the Company.  Each party has carefully read this
Agreement, has been afforded the opportunity to be advised of its meaning and
consequences by his or its respective attorneys, and signed the same of his or
its free will.

 

15.          SUCCESSORS AND ASSIGNS.  This Agreement shall bind the heirs,
personal representatives, successors, assigns, executors, and administrators of
each party, and inure to the benefit of each party, its agents, directors,
officers, employees, servants, heirs, successors and assigns.

 

16.          APPLICABLE LAW.  This Agreement shall be deemed to have been
entered into and shall be construed and enforced in accordance with the laws of
the State of California as applied to contracts made and to be performed
entirely within California.

 

17.          SEVERABILITY.  If a court or arbitrator of competent jurisdiction
determines that any term or provision of this Agreement is invalid or
unenforceable, in whole or in part, the remaining terms and provisions hereof
shall be unimpaired.  Such court or arbitrator will have the authority to modify
or replace the invalid or unenforceable term or provision with a valid and
enforceable term or provision that most accurately represents the parties’
intention with respect to the invalid or unenforceable term or provision.

 

18.          INDEMNIFICATION.  You will indemnify and save harmless the Company
from any loss incurred directly or indirectly by reason of the falsity or
inaccuracy of any representation made herein.  The Company will indemnify and
save harmless you from any loss incurred directly or indirectly by reason of the
falsity or inaccuracy of any representation made herein.  The Company and you
acknowledge and agree that the terms of the Company’s standard form of
indemnification agreement for members of the Board and executive officers of the
Company

 

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Jeffrey M. Nugent

                           2015

Page Six

 

have applied to you in your role as an executive officer of the Company, and the
Company hereby affirms its continuing agreements and obligations as set forth in
such indemnification agreement with you.

 

19.          AUTHORIZATION.  You and the Company warrant and represent that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein
and, further, that each of them are fully entitled and duly authorized to give
their complete and final general release and discharge.

 

20.          COUNTERPARTS.  This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.

 

21.          SECTION HEADINGS.  The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

22.          PHOTOCOPIES.  A photocopy of this executed Agreement shall be as
valid, binding, and effective as the original Agreement.

 

23.          SECTION 409A.  It is intended that all of the benefits and payments
payable under this Agreement satisfy, to the greatest extent possible, an
exemption from Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”), and this Agreement will be construed to the greatest extent
possible as consistent with those exemptions, and to the extent not so exempt,
this Agreement (and any definitions hereunder) will be construed to the greatest
extent possible in a manner that complies with Section 409A. For purposes of
Section 409A, your right to receive any installment payments under this
Agreement (whether severance payments, reimbursements 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. Notwithstanding any provision to the contrary in this
Agreement, if you are deemed by the Company at the time of your separation from
service to be a “specified employee” for purposes of Section 409A, and if any of
the payments upon separation from service set forth herein and/or under any
other agreement with the Company are deemed to be “deferred compensation”, then
to the extent delayed commencement of any portion of such payments is required
in order to avoid a prohibited distribution under Section 409A and the related
adverse taxation under Section 409A, such payments shall not be provided to you
prior to the earliest of (i) the expiration of the six-month period measured
from the date of your separation from service, (ii) the date of your death or
(iii) such earlier date as permitted under Section 409A without the imposition
of adverse taxation. If the release revocation period spans two calendar years,
payments will commence in the second of those two calendar years to the extent
required to comply with Section 409A.

 

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Jeffrey M. Nugent

                           2015

Page Seven

 

Please confirm your assent to the foregoing terms and conditions of our
Agreement by signing and returning a copy of this letter to me.

 

Sincerely,

 

 

 

SIENTRA, INC.

 

 

 

 

 

 

 

 

 

BY:

 

 

 

Chairman of the Board of Directors

 

 

 

 

 

Having read and reviewed the foregoing, I hereby agree to and accept the terms
and conditions of this Agreement as stated above.

 

 

 

 

 

Jeffrey M. Nugent

Date

 

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