| Item 1.01 | Entry into a Material Definitive Agreement. |
The information in Item 5.02 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On November 9, 2020, Jeffrey Nugent, Chairman and Chief Executive Officer of Sientra, Inc. (the “Company”), stepped down as Chairman of the Board and Chief Executive Officer and resigned from the Company’s Board of Directors (the “Board”), effective November 10, 2020 (the “Separation Date”). Mr. Nugent will remain as a non-executive employee of the Company to assist with the transition of his duties through December 31, 2020, at which time he will resign from the Company. Mr. Nugent’s decision to resign from the Board was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Appointment of Ronald Menezes as President and Chief Executive Officer
Effective November 10, 2020, the Board appointed Ronald Menezes as President and Chief Executive Officer of the Company. In addition, the Board appointed Mr. Menezes to the Board as a Class I director to fill the vacancy created by Mr. Nugent’s resignation, effective upon Mr. Nugent’s resignation from the Board. In connection with his appointment as President and Chief Executive Officer, the Company entered into an employment agreement with Mr. Menezes. Under the terms of Mr. Menezes’ employment agreement, Mr. Menezes will receive an annual base salary of $500,000. Mr. Menezes will receive for fiscal year 2020 a guaranteed bonus of $150,000 and thereafter is eligible to receive an annual performance bonus of up to one hundred percent (100%) of his then current base salary, which is determined by the achievement of certain corporate objectives and personal performance criteria as established by the Compensation Committee of the Board, or the Compensation Committee. Mr. Menezes is also entitled to reimbursement for up to $100,000 in relocation expenses.
Mr. Menezes will be granted (i) an option to purchase 500,000 shares of the Company’s common stock, 125,000 of which will vest on the one-year anniversary of the grant date with the remaining 375,000 vesting in equal monthly installments thereafter, (ii) 500,000 Restricted Stock Units which will vest in four equal annual installments beginning on the one-year anniversary of the grant date and (iii) 500,000 Performance Stock Units which will vest in accordance with the performance criteria and vesting schedule established by the Board.
Pursuant to the terms of the employment agreement, Mr. Menezes is entitled to severance benefits in the event that either the Company terminates him without cause or he resigns for good reason. The severance amount consists of twenty-four (24) months of Mr. Menezes’s annual base salary and a lump sum payment equal to the pro-rata portion, if any, of the then-current performance bonus earned as of the date of separation from service, and paid COBRA premiums for the twenty-four (24) month period following such termination. In the event that Mr. Menezes is terminated within twelve (12) months following a change in control, or if an acquiror does not assume or continue Mr. Menezes’ then unvested equity awards in connection with a change in control, in addition to the above severance benefits, Mr. Menezes’ unvested RSUs shall fully vest.
The foregoing is only a brief description of the material terms of the Employment Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the Employment Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Prior to joining the Company, Mr. Menezes, age 58, served as President and General Manager of Almirall U.S. – Dermatology, a subsidiary of Almirall, S.A., a pharmaceutical company, from August 2017 until November 2020. Prior to joining Almirall, Mr. Menezes served as Vice President of Sales and Operations of Assertio Therapeutics, Inc. (formerly Depomed Inc.), a specialty pharmaceutical company) from 2016 until August 2017. Formerly, Mr. Menezes served in a series of leadership roles at Allergan plc, Abbott Laboratories, Astellas Pharma Inc., Pfizer Inc. and Eli, Lilly and Co. Mr. Menezes holds a B.S. in International Business from Brigham Young University. Our Board believes Mr. Menezes is qualified to serve as one of our directors based on his business and management experience of several companies in the aesthetics industry.
There is no arrangement or understanding pursuant to which Mr. Menezes was selected as President and Chief Executive Officer, and there are no related party transactions between the Company and Mr. Menezes reportable under Item 404(a) of Regulation S-K.
Separation Agreement with Jeffrey Nugent
In connection with his resignation, on November 9, 2020, the Company entered into a Separation Agreement (the “Separation Agreement”) with Mr. Nugent. The Separation Agreement provides severance consistent with a termination without cause or resignation for good reason and provides that, in exchange for, among other things, a
