Exhibit 10.2

 

AMENDMENT No. 2 TO
EMPLOYMENT AGREEMENT

 

This Amendment No. 2 to Employment Agreement dated as of April 9, 2019 (this
“Amendment”) is entered into by and between Anika Therapeutics, Inc., a Delaware
corporation (the “Company”), and Sylvia Cheung (the “Executive”), and relates to
the Employment Agreement effective as of March 22, 2010 and amended as of
December 8, 2010 (the “Agreement”), between the Company and the Executive.

 

The Board of Directors of the Company approved certain changes to the Agreement
at a regularly-scheduled meeting on January 29, 2019. The Company and the
Executive desire to amend the Agreement as set forth herein regarding such
changes to the Executive’s Agreement. Section 17 of the Original Agreement
provides that the Original Agreement may be modified only by a written
instrument duly executed by both parties to the Original Agreement.

 

Now, Therefore, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive agree as follows with respect to the Agreement, all
effective as of the date hereof:

 

1.       Section 5(b) of the Original Agreement is amended in its entirety as
follows:

 

“(b)    Termination by the Company Without Cause or by the Executive with Good
Reason.  If the Executive’s employment is terminated by the Company without
Cause as provided in Section 4(d), or the Executive terminates her employment
for Good Reason as provided in Section 4(e), then the Company shall, through the
Date of Termination, pay the Executive her Accrued Benefit. If the Executive
signs a general release of claims in a form and manner satisfactory to the
Company (the ‘Release’) within 45 days of the receipt of the Release (which
shall be provided no later than within two business days after the Date of
Termination) and does not revoke such Release during the seven-day revocation
period,

 

(i)       the Company shall pay the Executive an amount (the ‘Severance Amount’)
equal to the sum of (A) the Executive’s current Base Salary plus (B) the
Executive’s target annual bonus for the fiscal year in which the Date of
Termination occurs. The Severance Amount shall be paid out in substantially
equal installments in accordance with the Company’s payroll practice over 12
months, beginning within 60 days after the Date of Termination; provided,
however, that if the 60-day period begins in one calendar year and ends in a
second calendar year, the Severance Amount will commence to be paid in the
second calendar year. Solely for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the ‘Code’), each installment payment is
considered a separate payment. Notwithstanding the foregoing, if the Executive
breaches any of the provisions contained in Section 8 of this Agreement, all
payments of the Severance Amount shall immediately cease; and

 

(ii)       subject to the Executive’s copayment of premium amounts at the active
employees’ rate, the Executive may continue to participate in the Company’s
group health, dental and vision program for 12 months; provided, however, that
the continuation of health benefits under this Section shall reduce and count
against the Executive’s rights under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (‘COBRA’); provided, however, that if the
Company determines necessary to avoid any adverse tax or other consequences for
the Executive or the Company, the Company may instead pay to the Executive on a
monthly basis during the period covered by this Section 5(b)(ii) an amount equal
to the difference between the applicable COBRA premium and the applicable active
employees’ rate for the coverage.”

 

 

 

 

2.       Sections 6(a)(i)(1) and (2) of the Original Agreement are amended in
their entirety as follows:

 

“(A)       Subject to the signing of the Release by the Executive within 45 days
of the receipt of the Release (which shall be provided no later than two
business days after the Date of Termination) and not revoking the Release during
the seven-day revocation period, the Company shall pay the Executive a lump sum
in cash in an amount (the ‘Change in Control Severance Amount’) equal to 1.5
times the sum of (I) the Executive’s current Base Salary (or the Executive’s
Base Salary in effect immediately prior to the Change in Control, if higher)
plus (II) the Executive’s target annual bonus for the current fiscal year (or if
higher, the target annual bonus for the fiscal year immediately prior to the
Change in Control). The Change in Control Severance Amount shall be paid to the
Executive by the 60th day after the later of the date of the Change in Control
and the Date of Termination; provided, however, that (x) if the Date of
Termination occurs during the three-month period before the Change in Control,
the payment under this Section 6(a)(i)(A) shall be reduced by any payments made
under Section 5(b)(i) before the date of the Change in Control; and (y) to the
extent that the Company determines necessary to comply with Section 409A of the
Code, all or a portion of the payments under this Section 6(a)(i)(A) shall be
made on the schedule set forth in Section 5(b)(i) rather than in a lump sum.

 

(B)       The Company shall pay to the Executive in a cash lump sum by the 60th
day after the later of the date of the Change in Control and the Date of
Termination, an amount equal to 18 times the excess of (I) the monthly premium
payable by former employees for continued coverage under COBRA for the same
level of coverage, including dependents, provided to the Executive under the
Company’s group health benefit plans in which the Executive participates
immediately prior to the Date of Termination over (II) the monthly premium paid
by active employees for the same coverage immediately prior to the Notice of
Termination.”

 

3.       Section 6(a)(ii) of the Original Agreement is amended in its entirety
as follows:

 

“(ii)    Notwithstanding anything to the contrary in any applicable option
agreement or stock-based award agreement:

 

(A)              All stock options and other stock-based awards held by the
Executive that were granted before January 29, 2019 shall immediately accelerate
and become fully exercisable or nonforfeitable as of the effective date of such
Change in Control. If any such award includes a performance-based vesting
condition, vesting shall be based on the greater of assumed target performance
or actual performance measured through the date of the Change in Control; and

 

(B)              All stock options and other stock-based awards held by the
Executive that were granted on or after January 29, 2019, (x) if assumed or
continued by the successor in the Change in Control (as set forth in Section
15.2.1(b) of the Company’s 2017 Omnibus Incentive Plan, or any similar provision
in any successor plan), and the Executive’s employment is terminated by the
Company without Cause as provided in Section 4(d) or the Executive terminates
his employment for Good Reason as provided in Section 4(e), in either case
within 3 months prior to or 12 months after the Change in Control, shall
immediately accelerate and become fully exercisable or nonforfeitable upon the
later of the Date of Termination or the effective date of the Change in Control,
and (y) if not assumed or continued by the successor in the Change in Control,
shall become fully vested and exercisable upon the effective date of the Change
in Control as provided in Section 6(a)(ii)(A). In that regard, for any such
award that includes a performance-based vesting condition, vesting shall be
based on the greater of assumed target performance or actual performance
measured through the date of accelerated vesting.

 

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For the avoidance of any doubt, the provisions of this Section 6(a)(ii) shall
supersede the provisions contained in the applicable award agreements, provided
that the provisions of the award agreements will control to the extent such
provisions are more favorable to the Executive.”

 

4.       Section 6(b) of the Original Agreement is amended in its entirety as
follows:

 

“(b)    Section 280G.  If any of the payments or benefits received or to be
received by the Executive (including, without limitation, any payment or
benefits received in connection with a Change in Control or the Executive’s
termination of employment, whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement, or otherwise) (all such payments
collectively referred to herein as the ‘280G Payments’) constitute ‘parachute
payments’ within the meaning of Section 280G of the Code and would, but for this
Section 6(b), be subject to the excise tax imposed under Section 4999 of the
Code (the ‘Excise Tax’), then prior to making the 280G Payments, a calculation
shall be made comparing (i) the Net Benefit (as defined below) to the Executive
of the 280G Payments after payment of the Excise Tax to (ii) the Net Benefit to
the Executive if the 280G Payments are limited to the extent necessary to avoid
being subject to the Excise Tax.  Only if the amount calculated under (i) above
is less than the amount under (ii) above will the 280G Payments be reduced to
the minimum extent necessary to ensure that no portion of the 280G Payments is
subject to the Excise Tax. ‘Net Benefit’ shall mean the present value of the
280G Payments net of all federal, state, local, foreign income, employment, and
excise taxes. Any reduction made pursuant to this Section 6(b) shall be made in
a manner determined by the Company that is consistent with the requirements of
Section 409A of the Code.”

 

5.       Section 6(c)(ii) of the Original Agreement is amended in its entirety
as follows:

 

“(ii)    the date a majority of the members of the Board is replaced during the
longer of (a) any 12-month period or (b) the period covering two consecutive
annual meetings of the Company’s stockholders, in either case by directors whose
appointment or election is not endorsed by a majority of the members of the
Board before the date of the appointment or election (other than an endorsement
that occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consent by or on behalf of a person other than the
Board); or”

 

6.       The following sentence is added to the end of Section 7(c) of the
Original Agreement:

 

“To the extent required by Section 409A of the Code, each reimbursement or
in-kind benefit provided under the Agreement shall be provided in accordance
with the following: (i) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during each calendar year cannot affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year, (ii) any reimbursement of an eligible expense shall be paid to
the Executive on or before the last day of the calendar year following the
calendar year in which the expense was incurred, and (iii) any right to
reimbursements or in-kind benefits under the Agreement shall not be subject to
liquidation or exchange for another benefit.”

 

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7.       Except as set forth herein, the terms of the Original Agreement are
unchanged and remain in full force and effect.

 

In Witness Whereof, the parties hereby execute this Amendment as of the date
first written above.

 

  Anika Therapeutics, Inc.                 By: /s/ Joseph Darling       Name:
Joseph Darling       Title: President and Chief Executive Officer              
                            Sylvia Cheung                     /s/ Sylvia Cheung
 

 

 

 

 

 

 

 

 

 

 

 

 

 

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