Exhibit 10.35

ANIKA THERAPEUTICS, INC.

 

Form of Change in Control, Bonus and Severance Agreement

 

 

AGREEMENT made as of June 9, 2003 by and among Anika Therapeutics, Inc., a
Massachusetts corporation with its principal place of business in Woburn,
Massachusetts (the “Company”), and Francesco (Frank) J. Luppino, of Melrose, MA
(the “Executive”), an individual presently employed as the Vice President
Operations of the Company.

 

1.                                       Purpose.  The Company considers it
essential to the best interests of its stockholders to foster the continuous
employment of key management personnel.  The Board of Directors of the Company
(the “Board”) recognizes, however, that, as is the case with many publicly held
corporations, the possibility of a Change in Control (as defined in Section 2
hereof) exists and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders. 
Therefore, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company’s management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control.  Nothing in this Agreement shall be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Executive and the Company, the
Executive shall not have any right to be retained in the employ of the Company.

 

2.                                       Change in Control.  A “Change in
Control” shall mean the occurrence of any one of the following events:

 

(a)                                  any “person,” as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Act”)
(other than the Company, any of its subsidiaries, any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan or
trust of the Company or any of its subsidiaries), together with all “affiliates”
and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such
person, shall become the “beneficial owner” (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the Company’s then
outstanding securities having the right to vote in an election of the Company’s
Board of Directors (“Voting Securities”); or

 

(b)                                 persons who, as of the date hereof,
constitute the Company’s Board of Directors (the “Incumbent Directors”) cease
for any reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the date hereof whose election or nomination

 

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Change in Control, Bonus and Severance Agreement–Francesco (Frank) J. Luppino

 

for election was approved by a vote of at least a majority of the Incumbent
Directors shall, for purposes of this Agreement, be considered an Incumbent
Director; or

 

(c)                                  the stockholders of the Company shall
approve (A) any consolidation or merger of the Company where the shareholders of
the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate 51% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any), (B) any sale, lease, exchange or other transfer (in
one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the Company
or (C) any plan or proposal for the liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred for purposes of the foregoing clause (a) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Voting Securities outstanding, increases the proportionate voting power
represented by the Voting Securities beneficially owned by any person to 51% or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a share split, stock dividend or similar
transaction or direct purchase from the Company), then a “Change in Control”
shall be deemed to have occurred for purposes of the foregoing clause (a).

 

3.                                       Terminating Event.  A “Terminating
Event” shall mean any of the events provided in this Section 3 occurring within
twelve (12) months subsequent to a Change in Control as defined in Section 2:

 

(a)                                  termination by the Company of the
employment of the Executive with the Company for any reason other than for Cause
or the death of the Executive.  “Cause” shall mean, and shall be limited to, the
occurrence of any one or more of the following events:

 

(i)                                     a willful act of dishonesty by the
Executive with respect to any matter involving the Company;

 

(ii)                                  conviction of the Executive of a crime
involving moral turpitude; or

 

(iii)                               the deliberate or willful failure by the
Executive (other than by reason of the Executive=s physical or mental illness,
incapacity or disability) to substantially perform the Executive’s duties with
the Company and the continuation of such failure for a period of 30 days after
delivery by the

 

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Company to the Executive of written notice specifying the scope and nature of
such failure and its intention to terminate the Executive for Cause.

 

A Terminating Event shall not be deemed to have occurred pursuant to this
Section 3(a) solely as a result of the Executive being an employee of any direct
or indirect successor to the business or assets of the Company, rather than
continuing as an employee of the Company following a Change in Control.

 

(b)                                 termination by the Executive of the
Executive’s employment with the Company for Good Reason.  “Good Reason” shall
mean the occurrence of any of the following events:

 

(i)                                     a substantial adverse change in the
nature or scope of the Executive’s responsibilities or duties from the
responsibilities or duties exercised by the Executive immediately prior to the
Change in Control, it being understood by the parties hereto, that so long as
the Executive retains primary sales and marketing responsibilities for the
business conducted by Anika immediately prior to the Change in Control, Good
Reason shall not exist under this Section 3(b)(i); or

 

(ii)                                  a reduction in the Executive=s annual base
salary and/or benefits as in effect on the date hereof or as the same may be
increased from time to time except for across-the-board salary and/or benefits
reductions similarly affecting all or substantially all management employees.

 

For purposes of this Section 3, unless the context otherwise requires, Company
shall mean the Company or any successor thereto or to the business thereof in a
transaction involving a Change in Control.

 

4.                                       Special Termination Payments.  In the
event a Terminating Event occurs within twelve (12) months after a Change in
Control in lieu of any payments under the Employment Letter (as hereinafter
defined),

 

(a)                                  the Company shall pay to the Executive, in
addition to the payment, if any, required by Section 5, an amount equal to 100%
of the Executive’s annual salary as in effect immediately prior to the Change in
Control, said amount shall be paid in one lump sum payment no later than
thirty-one (31) days following the Date of Termination (as such term is defined
in Section 9(b)); and

 

(b)                                 the Company shall continue to provide
health, dental, long-term disability, life insurance and other fringe benefits
to the Executive, on the same terms and conditions (including any required
co-payments) as though the Executive had remained an active employee, for twelve
(12) months; and

 

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(c)                                  the Company shall provide COBRA benefits to
the Executive following the end of the period referred to in Section 4(c) above,
such benefits to be determined as though the Executive’s employment had
terminated at the end of such period.

 

5.                                       Payment Upon Effective Date of Change
in Control.  Upon the effective date of a Change in Control, regardless of
whether a Terminating Event has occurred, in addition to any other payment
required by Section 4, the Company shall pay the Executive an amount in cash
representing fifty percent (50%) of the Executive’s annual salary as in effect
immediately prior to the Change in Control.  Said amount shall be paid in one
lump sum payment no later than thirty-one (31) days following the effective date
of a Change in Control.

 

6.                                       Certain Limitations.  It is the
intention of the Executive and of the Company that no payments by the Company to
or for the benefit of the Executive under this Agreement or any other agreement
or plan, if any, pursuant to which the Executive is entitled to receive payments
or benefits shall be nondeductible to the Company by reason of the operation of
Section 280G of the Code relating to parachute payments or any like statutory or
regulatory provision.  Accordingly, and notwithstanding any other provision of
this Agreement or any such agreement or plan, if by reason of the operation of
said Section 280G or any like statutory or regulatory provision, any such
payments exceed the amount which can be deducted by the Company, such payments
shall be reduced to the maximum amount which can be deducted by the Company.  To
the extent that payments exceeding such maximum deductible amount have been made
to or for the benefit of the Executive, such excess payments shall be refunded
to the Company with interest thereon at the applicable Federal rate determined
under Section 1274(d) of the Code, compounded annually, or at such other rate as
may be required in order that no such payments shall be nondeductible to the
Company by reason of the operation of said Section 280G or any like statutory or
regulatory provision.  To the extent that there is more than one method of
reducing the payments to bring them within the limitations of said Section 280G
or any like statutory or regulatory provision, the Executive shall determine
which method shall be followed, provided that if the Executive fails to make
such determination within forty-five (45) days after the Company has given
notice of the need for such reduction, the Company may determine the method of
such reduction in its sole discretion.

 

7.                                       Term.  This Agreement shall take effect
on the date first set forth above and shall terminate upon the earliest of (a)
the termination by the Company of the employment of the Executive for Cause; (b)
the cessation of the Executive’s employment with the Company for any reason or
the resignation or termination of the Executive for any reason, in each case,
prior to a Change in Control; or (c) the resignation of the Executive after a
Change in Control for any reason other than for Good Reason.

 

8.                                       Withholding.  All payments made by the
Company under this Agreement shall be net of any tax or other amounts required
to be withheld by the Company under applicable law.

 

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9.                                       Notice and Date of Termination;
Disputes; Etc.

 

(a)                                  Notice of Termination.  After a Change in
Control and during the term of this Agreement, any purported termination of the
Executive’s employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other party hereto in
accordance with this Section 9.  For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and the Date of Termination.  Further, a
Notice of Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Board (exclusive of the Executive) at a meeting of the Board
(after reasonable notice to the Executive and an opportunity for the Executive,
accompanied by the Executive’s counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the termination met the criteria
for Cause set forth in Section 3(a) hereof.

 

(b)                                 Date of Termination.  “Date of Termination,”
with respect to any purported termination of the Executive’s employment after a
Change in Control and during the term of this Agreement, shall mean the date
specified in the Notice of Termination.  In the case of a termination by the
Company other than a termination for Cause (which may be effective immediately),
the Date of Termination shall not be less than 30 days after the Notice of
Termination is given.  In the case of a termination by the Executive, the Date
of Termination shall not be less than 15 days from the date such Notice of
Termination is given.  Notwithstanding Section 3(a) of this Agreement, in the
event that the Executive gives a Notice of Termination to the Company, the
Company may unilaterally accelerate the Date of Termination and such
acceleration shall not result in a second Terminating Event for purposes of
Section 3(a) of this Agreement.

 

(c)                                  No Mitigation.  The Company agrees that, if
the Executive’s employment by the Company is terminated during the term of this
Agreement, the Executive is not required to seek other employment or to attempt
in any way to reduce any amounts payable to the Executive by the Company
pursuant to Sections 4 and 5 hereof.  Further, the amount of any payment
provided for in this Agreement shall not be reduced by any compensation earned
by the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

 

(d)                                 Mediation of Disputes.  The parties shall
endeavor in good faith to settle within 90 days any controversy or claim arising
out of or relating to this Agreement or the breach thereof through mediation
with J.A.M.S./Endispute or similar organizations.  If the controversy or claim
is not resolved within 90 days, the parties shall be free to pursue other legal
remedies in law or equity.

 

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10.                                 Assignment; Prior Agreements;
Non-Solicitation.  Except for an assignment by the Company in connection with a
Change in Control in which the successor, if other than the Company, shall
assume and agree to perform this Agreement in writing, neither the Company nor
the Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the other
party, and without such consent any attempted transfer shall be null and void
and of no effect.  This Agreement shall inure to the benefit of and be binding
upon the Company and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.  In the event of the Executive’s
death after a Terminating Event but prior to the completion by the Company of
all payments due him under Sections 4 and 5 of this Agreement, the Company shall
continue such payments to the Executive’s beneficiary designated in writing to
the Company prior to his death (or to his estate, if the Executive fails to make
such designation).  This Agreement supercedes all prior Agreements, whether
written or oral with respect to the subject matter hereof.  Notwithstanding the
foregoing that certain Non-Disclosure and Non-Competition Agreement of September
14, 1999, by and between Executive and the Company shall remain in full force
and effect in accordance with its terms.

 

Executive covenants to the Company that during his employment with the Company
and until one (1) year from the date he is no longer employed by the Company,
any affiliate thereof or any successor thereto, he will not in any manner, on
his own behalf, or as a partner, officer, director, employee, agent or entity,
directly or indirectly, induce or attempt to influence any person serving as an
employee of the Company or any successor thereto to leave its employ or hire any
such person.

 

11.                                 Enforceability.  If any portion or provision
of this Agreement shall to any extent be declared illegal or unenforceable by a
court of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

 

12.                                 Waiver.  No waiver of any provision hereof
shall be effective unless made in writing and signed by the waiving party.  The
failure of any party to require the performance of any term or obligation of
this Agreement, or the waiver by any party of any breach of this Agreement,
shall not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach.

 

13.                                 Notices.  Any notices, requests, demands,
and other communications provided for by this Agreement shall be sufficient if
in writing and delivered in person or sent by registered or certified mail,
postage prepaid, to the Executive at the last address the Executive has filed in
writing with the Company, or to the Company at its main office, attention of the
Board of Directors.

 

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14.                                 Effect on Other Plans.  Except as provided
in Section 10 hereof, nothing in this Agreement shall be construed to limit the
rights of the Executive under the Company’s benefit plans, programs or policies.

 

15.                                 Amendment.  This Agreement may be amended or
modified only by a written instrument signed by the Executive and by a duly
authorized representative of the Company.

 

16.                                 Governing Law.  This is a Massachusetts
contract and shall be construed under and be governed in all respects by the
laws of the Commonwealth of Massachusetts.

 

17.                                 Obligations of Successors.  In addition to
any obligations imposed by law upon any successor to the Company, the Company
will use its commercially reasonable efforts to require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company by their duly authorized officers and by the Executive, as of the
date first above written.

 

 

 

COMPANY:

 

 

 

ANIKA THERAPEUTICS, INC.

 

 

 

 

 

By:

    /s/ Charles H. Sherwood

 

 

Charles H. Sherwood, Ph.D.

 

President and Chief Executive Officer

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

/s/ Frank Luppino

 

 

Francesco (Frank) J. Luppino

 

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