a5810432ex10_2.htm


    EXHIBIT
10.2

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (“Agreement”) is made as of the 17th day of October, 2008
between Anika Therapeutics, Inc., a Massachusetts corporation (the “Company”),
and Kevin Quinlan (the “Executive”).

     

    WHEREAS,
the Company desires to employ the Executive and the Executive desires to be
employed by the Company on the terms contained herein.

     

    NOW,
THEREFORE, in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

     

    1.           Employment.  Subject
to the provisions of Section 4, the term of this Agreement shall commence on
October 17, 2008 and shall remain in effect indefinitely unless terminated
pursuant to Section 4.   The term of this Agreement may be
referred to herein as the “Term.”

     

    2.           Position and
Duties.  During the Term, the Executive shall serve as the
Chief Financial Officer of the Company, and shall have responsibility for
overseeing the entire financial function of the Company, including overseeing
financial plans and policies, overseeing accounting practices, overseeing
internal controls and procedures, ensuring compliance with all provisions of the
Sarbanes-Oxley Act of 2002, and directing the Controller and accounting
functions, treasury, public relations, investor relations, and shall have such
other powers and duties as may from time to time be prescribed by the Board of
Directors of the Company (the “Board”), the  Chief Executive Officer
of the Company (the “CEO”) or other authorized executives, provided that such
duties are consistent with the Executive’s position or other positions that he
may hold from time to time.  The Executive shall devote his full
working time and efforts to the business and affairs of the
Company.  Notwithstanding the foregoing, the executive may engage in
religious, charitable or other community activities as long as such services and
activities are disclosed to the CEO and do not materially interfere with the
Executive’s performance of his duties to the Company as provided in this
Agreement.

     

    3.           Compensation and Related
Matters.

     

    (a)           Base
Salary.  The Executive’s initial annual base salary shall be
$261,888.  The Executive’s base salary shall be reviewed annually
by the Board or the
Compensation Committee of the Board (the “Compensation
Committee”).  The base salary in effect at any given time is referred
to herein as “Base Salary.”  The Base Salary shall be payable in
substantially equal bi-weekly installments.

     

    (b)           Incentive
Compensation.  The Executive shall be eligible to receive cash
incentive compensation as approved by the Board or the
Compensation Committee from time to time in its sole discretion.  The
Executive’s target annual bonus shall initially be 30% percent of his Base
Salary, subject to adjustment in the sole discretion of the Compensation
Committee or the Board.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Expenses.  The
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder during the Term, in
accordance with the policies and procedures then in effect and established by
the Company for its senior executive officers.

     

    (d)           Other
Benefits.  During the Term, the Executive shall be entitled to
continue to participate in or receive benefits under all of the Company’s
Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide the Executive with benefits at least substantially
equivalent to those provided under such Employee Benefit Plans.  As
used herein, the term “Employee Benefit Plans” includes, without limitation,
each pension and retirement plan; supplemental pension, retirement and deferred
compensation plan; savings and profit-sharing plan; stock ownership plan; stock
purchase plan; stock option plan; life insurance plan; medical insurance plan;
disability plan; and health and accident plan or arrangement established and
maintained by the Company on the date hereof for employees of the same status
within the hierarchy of the Company.  During the Term, the Executive
shall be entitled to participate in or receive benefits under any employee
benefit plan or arrangement which may, in the future, be made available by the
Company to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plan or arrangement.   Any payments or benefits payable to the
Executive under a plan or arrangement referred to in this Section 3(d) in
respect of any calendar year during which the Executive is employed by the
Company for less than the whole of such year shall, unless otherwise provided in
the applicable plan or arrangement, be prorated in accordance with the number of
days in such calendar year during which he is so employed.  Should any
such payments or benefits accrue on a fiscal (rather than calendar) year, then
the proration in the preceding sentence shall be on the basis of a fiscal year
rather than calendar year.

     

    (e)           Vacations.  The
Executive shall be entitled to 20 paid vacation days in each calendar year,
which shall be accrued ratably during the calendar year.  The
Executive shall also be entitled to all paid holidays given by the Company to
its executives.

     

    4.           Termination.  The
Executive’s employment hereunder may be terminated without any breach of this
Agreement under the following circumstances:

     

    (a)           Death.  The
Executive’s employment hereunder shall terminate upon his death.

     

    (b)           Disability.  The
Company may terminate the Executive’s employment if he is disabled and unable to
perform the essential functions of the Executive’s then existing position or
positions under this Agreement with or without reasonable accommodation for a
period of 180 days (which need not be consecutive) in any 12-month
period.  If any question shall arise as to whether during any period
the Executive is disabled so as to be unable to perform the essential functions
of the Executive’s then existing position or positions with or without
reasonable accommodation, the Executive may, and at the request of the Company
shall, submit to the Company a certification in reasonable detail by a physician
selected by the Company to whom the Executive or the Executive’s guardian has no
reasonable objection as to whether the Executive is so disabled or how long such
disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue.  The Executive
shall cooperate with any reasonable request of the physician in connection with
such certification.  If such question shall arise and the Executive
shall fail to submit such certification, the Company’s determination of such
issue shall be binding on the Executive.  Nothing in this Section 4(b)
shall be construed to waive the Executive’s rights, if any, under existing law
including, without limitation, the Family and Medical Leave Act of 1993, 29
U.S.C. §2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

     

    
      
        
        

      

      
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    (c)           Termination by Company for
Cause.  At any time during the Term, the Company may terminate
the Executive’s employment hereunder for Cause if at a meeting of the Board
called and held for such purpose, a majority of the Board, exclusive of the
Executive, determines in good faith that the Executive is guilty of conduct that
constitutes “Cause” as defined herein.  For purposes of this
Agreement, “Cause” shall mean:  (i) conduct by the Executive
constituting a material act of willful misconduct in connection with the
performance of his duties, including, without limitation, misappropriation of
funds or property of the Company or any of its subsidiaries or affiliates other
than the occasional, customary and de minimis use of Company property for
personal purposes; (ii) the commission by the Executive of any felony or a
misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any
conduct by the Executive that would reasonably be expected to result in material
injury to the Company or any of its subsidiaries and affiliates if he were
retained in his position; (iii) continued, willful and deliberate
non-performance by the Executive of his duties hereunder (other than by reason
of the Executive’s physical or mental illness, incapacity or disability) which
has continued for more than 30 days following written notice of such
non-performance from the CEO or the Board; (iv) a breach by the Executive of any
of the provisions contained in Section 8 of this Agreement; (v) a violation by
the Executive of the Company’s employment policies which has continued following
written notice of such violation from the CEO or the Board, or (vi) willful
failure to cooperate with a bona fide internal investigation or an investigation
by regulatory or law enforcement authorities, after being instructed by the
Company to cooperate, or the willful destruction or failure to preserve
documents or other materials known to be relevant to such investigation or the
willful inducement of others to fail to cooperate or to produce documents or
other materials in connection with such investigation.  For purposes
of clauses (i), (iii) or (vi) hereof, no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done,
by the Executive without reasonable belief that the Executive’s act or failure
to act, was in the best interest of the Company and its subsidiaries and
affiliates.

     

    (d)           Termination Without
Cause.  At any time during the Term, the Company may terminate
the Executive’s employment hereunder without Cause.  Any termination
by the Company of the Executive’s employment under this Agreement which does not
constitute a termination for Cause under Section 4(c) and does not result from
the death or disability of the Executive under Section 4(a) or (b) shall be
deemed a termination without Cause.

     

    (e)           Termination by the
Executive.  At any time during the Term, the Executive may
terminate his employment hereunder for any reason, including but not limited to
Good Reason.  For purposes of this Agreement, “Good Reason” shall mean
that the Executive has complied with the “Good Reason Process” (hereinafter
defined) following the occurrence of any of the following events:  (i)
a material diminution in the Executive’s responsibilities, authority or duties;
(ii) a material diminution in the Executive’s Base Salary except for
across-the-board salary reductions based on the Company’s financial performance
similarly affecting all or substantially all senior management employees of the
Company; (iii) a material change in the geographic location at which the
Executive provides services to the Company; or (iv) the material breach of this
Agreement by the Company.  “Good Reason Process” shall mean that (i)
the Executive reasonably determines in good faith that a “Good Reason” condition
has occurred; (ii) the Executive notifies the Company in writing of the
occurrence of the Good Reason condition within 60 days of the occurrence of such
condition; (iii) the Executive cooperates in good faith with the Company’s
efforts, for a period not less than 30 days following such notice (the “Cure
Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good
Reason condition continues to exist; and (v) the Executive terminates his
employment within 60 days after the end of the Cure Period.  If the
Company cures the Good Reason condition during the Cure Period, Good Reason
shall be deemed not to have occurred.

     

    
      
        
        

      

      
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    (f)           Notice of
Termination.  Except for termination as specified in Section
4(a), any termination of the Executive’s employment by the Company or any such
termination by the Executive shall be communicated by written Notice of
Termination to the other party hereto.  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.

     

    (g)           Date of
Termination.  “Date of Termination” shall mean:  (i)
if the Executive’s employment is terminated by his death, the date of his death;
(ii) if the Executive’s employment is terminated on account of disability under
Section 4(b) or by the Company for Cause under Section 4(c), the date on which
Notice of Termination is given; (iii) if the Executive’s employment is
terminated by the Company under Section 4(d), 30 days after the date on which a
Notice of Termination is given; (iv) if the Executive’s employment is terminated
by the Executive under Section 4(e) without Good Reason, 30 days after the date
on which a Notice of Termination is given, and (v) if the Executive’s employment
is terminated by the Executive under Section 4(e) with Good Reason, the date on
which a Notice of Termination is given after the end of the Cure
Period.  Notwithstanding the foregoing, 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 termination by the Company for purposes of this
Agreement.

     

    5.           Compensation Upon
Termination.

     

    (a)           Termination
Generally.  If the Executive’s employment with the Company is
terminated for any reason during the Term, the Company shall pay or provide to
the Executive (or to his authorized representative or estate) any earned but
unpaid base salary, incentive compensation earned but not yet paid, unpaid
expense reimbursements, accrued but unused vacation and any vested benefits the
Executive may have under any employee benefit plan of the Company (the “Accrued
Benefit”) within 30 days of the Executive’s Date of Termination.

     

    (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 his employment for Good Reason as
provided in Section 4(e), then the Company shall, through the Date of
Termination, pay the Executive his 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 and does
not revoke such Release during the seven day revocation period,

     

    
      
        
        

      

      
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    (i)           the
Company shall pay the Executive an amount equal to the Executive’s Base Salary
for the current fiscal year (the “Severance Amount”).  The Severance
Amount shall be paid out in substantially equal installments in accordance with
the Company’s payroll practice over 12 months, beginning on the first payroll
date after the Date of Termination or expiration of the seven-day revocation
period for the Release, if later.  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”).

     

    6.           Change in Control
Payment.  The provisions of this Section 6 set forth certain
terms of an agreement reached between the Executive and the Company regarding
the Executive’s rights and obligations upon the occurrence of a Change in
Control of the Company, as defined herein.  These provisions are
intended to assure and encourage in advance the Executive’s continued attention
and dedication to his assigned duties and his objectivity during the pendency
and after the occurrence of any such event.  These provisions shall
apply in lieu of, and expressly supersede, the provisions of Section 5(b)
regarding severance pay and benefits upon a termination of employment, if such
termination of employment occurs within 3 months prior to or 12 months after the
occurrence of the first event constituting a Change in Control, provided that
such first event occurs during the Term.  These provisions shall
terminate and be of no further force or effect beginning 12 months after the
occurrence of a Change in Control, in which case the provisions of Section 5(b)
shall once again become applicable.

     

    (a)           Change in
Control.  (i) If within 3 months prior to or 12 months after a
Change in Control, 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), then

     

    (A)           Subject
to the signing of the Release by the Executive within 45 days of the receipt of
the Release 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 equal
to 11⁄2 times the sum
of (A) the Executive’s current Base Salary (or the Executive’s Base Salary in
effect immediately prior to the Change in Control, if higher) plus (B) 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) on the first payroll date following the Date of Termination or the
expiration of the seven-day revocation period for the Release, if later;
and

     

    
      
        
        

      

      
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    (B)           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 18 months; provided, however, that the continuation of
health benefits under this Section shall reduce and count against the
Executive’s rights under COBRA.

     

    (ii)           Notwithstanding
anything to the contrary in any applicable option agreement or stock-based award
agreement, upon the occurrence of a Change in Control, all stock options and
other stock-based awards held by the Executive shall immediately accelerate and
become fully exercisable or nonforfeitable as of the effective date of such
Change in Control.

     

    (iii)           Notwithstanding
anything to the contrary in this Agreement, it is expressly understood by the
parties hereto that so long as the Executive retains primary management
responsibilities for the business conducted by the Company immediately prior to
a Change in Control, “Good Reason” shall not exist under Section
4(e)(i).

     

    (b)           Gross-Up
Payment.

     

    (i)           Anything
in this Agreement to the contrary notwithstanding, in the event that any
compensation, payment or distribution by the Company to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (the “Severance Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code, the following
provisions shall apply:

     

    (A)           If
the Severance Payments, reduced by the sum of (1) the Excise Tax (as defined
below) and (2) the total of the Federal, state, and local income and employment
taxes payable by the Executive on the amount of the Severance Payments which are
in excess of the Threshold Amount (as defined below), are greater than or equal
to the Threshold Amount, the Executive shall be entitled to the full benefits
payable under this Agreement.

     

    (B)           If
the Threshold Amount is less than (x) the Severance Payments, but greater than
(y) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the
total of the Federal, state, and local income and employment taxes on the amount
of the Severance Payments which are in excess of the Threshold Amount, then the
benefits payable under this Agreement shall be reduced (but not below zero) to
the extent necessary so that the sum of all Severance Payments shall not exceed
the Threshold Amount.  In such event, the Severance Payments shall be
reduced in the following order: (1) cash payments subject to Section 409A of the
Code; (2) cash payments not subject to Section 409A of the Code; (3)
equity-related payments or acceleration; and (4) non-cash forms of
benefits.  To the extent any payment is to be made over time (e.g., in
installments, etc.), then the payments shall be reduced in reverse chronological
order.

     

    
      
        
        

      

      
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    (ii)           For
the purposes of this Section 6(b), “Threshold Amount” shall mean three times the
Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code
and the regulations promulgated thereunder less one dollar ($1.00); and “Excise
Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any
interest or penalties incurred by the Executive with respect to such excise
tax.

     

    (iii)           The
determination as to which of the alternative provisions of Section 6(b)(i) shall
apply to the Executive shall be made by a nationally recognized accounting firm
selected by the Company (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the Date of Termination, if applicable, or at such earlier time as is
reasonably requested by the Company or the Executive.  For purposes of
determining which of the alternative provisions of Section 6(b)(i) shall apply,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for the
calendar year in which the determination is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive’s residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.  Any determination by the Accounting
Firm shall be binding upon the Company and the Executive.

     

    (c)           Definitions.  For
purposes of this Section 6, the following terms shall have the following
meanings:

     

    “Change in
Control” shall mean any of the following:

     

    (i)           any
“person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or 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 more than 50
percent of the combined voting power of the Company’s then outstanding
securities having the right to vote in an election of the Board (“Voting
Securities”) (in such case other than as a result of an acquisition of
securities directly from the Company); or

     

    
      
        
        

      

      
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    (ii)           the
date a majority of the members of the Board is replaced during any 12-month
period 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;
or

     

    (iii)           the
consummation of (A) any consolidation or merger of the Company where the
stockholders 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 more than 50 percent of the voting shares
of the Company issuing cash or securities in the consolidation or merger (or of
its ultimate parent corporation, if any), or (B) any sale 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.

     

    Notwithstanding
the foregoing, a “Change in Control” shall not be deemed to have occurred for
purposes of the foregoing clause (i) 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 number of Voting Securities
beneficially owned by any person to more than 50 percent of the combined voting
power of all of the 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 stock split, stock dividend, or similar transaction or as a result
of an acquisition of securities directly from the Company) and immediately
thereafter beneficially owns more than 50 percent of the combined voting power
of all of the then outstanding Voting Securities, then a “Change in Control”
shall be deemed to have occurred for purposes of the foregoing clause
(i).

     

    7.           Section
409A.

     

    (a)           Anything
in this Agreement to the contrary notwithstanding, if at the time of the
Executive’s separation from service within the meaning of Section 409A of the
Code, the Company determines that the Executive is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any
payment or benefit that the Executive becomes entitled to under this Agreement
would be considered deferred compensation subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executive’s separation from
service, or (B) the Executive’s death.  If any such delayed cash
payment is otherwise payable on an installment basis, the first payment shall
include a catch-up payment covering amounts that would otherwise have been paid
during the six-month period but for the application of this provision, and the
balance of the installments shall be payable in accordance with their original
schedule.  Any such delayed cash payment shall earn interest at an
annual rate equal to the applicable federal short-term rate published by the
Internal Revenue Service for the month in which the date of separation from
service occurs, from such date of separation from service until the
payment.

     

    (b)           The
parties intend that this Agreement will be administered in accordance with
Section 409A of the Code.  To the extent that any provision of this
Agreement is ambiguous as to its compliance with Section 409A of the Code, the
provision shall be read in such a manner so that all payments hereunder comply
with Section 409A of the Code.  The parties agree that this Agreement
may be amended, as reasonably requested by either party, and as may be necessary
to fully comply with Section 409A of the Code and all related rules and
regulations in order to preserve the payments and benefits provided hereunder
without additional cost to either party.

     

    
      
        
        

      

      
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    (c)           The
determination of whether and when a separation from service has occurred shall
be made in accordance with the presumptions set forth in Treasury Regulation
Section 1.409A-1(h).

     

    (d)           The
Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined
to constitute deferred compensation subject to Section 409A of the Code but do
not satisfy an exemption from, or the conditions of, such Section.

     

    8.           Confidential Information,
Noncompetition and Cooperation.

     

    (a)           Confidential
Information.  As used in this Agreement, “Confidential
Information” means information belonging to the Company which is of value to the
Company in the course of conducting its business and the disclosure of which
could result in a competitive or other disadvantage to the
Company.  Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions, improvements and
other intellectual property; trade secrets; know-how; designs, processes or
formulae; software; market or sales information or plans; customer lists; and
business plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Company.  Confidential Information
includes information developed by the Executive in the course of the Executive’s
employment by the Company, as well as other information to which the Executive
may have access in connection with the Executive’s
employment.  Confidential Information also includes the confidential
information of others with which the Company has a business
relationship.  Notwithstanding the foregoing, Confidential Information
does not include information in the public domain, unless due to breach of the
Executive’s duties under Section 8(b).

     

    (b)           Confidentiality.  The
Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Company with
respect to all Confidential Information.  At all times, both during
the Executive’s employment with the Company and after its termination, the
Executive will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
written consent of the Company, except as may be necessary in the ordinary
course of performing the Executive’s duties to the Company.

     

    (c)           Assignment of
Inventions.  The Executive understands that the Company is now and may
hereafter be subject to non-disclosure or confidentiality agreements with third
persons which require the Company to protect or refrain from use of Confidential
Information.  The Executive agrees to be bound by the terms of such
agreements in the event the Executive has access to such Confidential
Information. 

     

    
      
        
        

      

      
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    (d)           Developments.

     

    (i)           The
Executive will make full and prompt disclosure to the Company of all inventions,
discoveries, designs, developments, methods, modifications, improvements,
processes, algorithms, databases, computer programs, formulae, techniques, trade
secrets, graphics or images, and audio or visual works and other works of
authorship (collectively “Developments”), whether or not patentable or
copyrightable, that are created, made, conceived or reduced to practice by him
(alone or jointly with others) or under his direction during the period of his
employment.  The Executive acknowledges that all work performed by him
is on a “work for hire” basis, and the Executive does hereby assign and transfer
and, to the extent any such assignment cannot be made at present, will assign
and transfer, to the Company and its
successors and assigns all his right, title and interest in all Developments
that (a) relate to the business of the Company or any customer of or supplier to
the Company or any of the products or services being researched, developed,
manufactured or sold by the Company or which may be used with such products or
services; or (b) result from tasks assigned to him by the Company; or (c) result
from the use of premises or personal property (whether tangible or intangible)
owned, leased or contracted for by the Company (“Company-Related Developments”),
and all related patents, patent applications, trademarks and trademark
applications, copyrights and copyright applications, and other intellectual
property rights in all countries and territories worldwide and under any
international conventions (“Intellectual Property Rights”).

     

    (ii)           To
preclude any possible uncertainty, the Executive has set forth on Exhibit A attached
hereto a complete list of Developments that he has, alone or jointly with
others, conceived, developed or reduced to practice prior to the commencement of
his employment with the Company that he considers to be his property or the
property of third parties and that he wishes to have excluded from the scope of
this Agreement (“Prior Inventions”).  If disclosure of any such Prior
Invention would cause him to violate any prior confidentiality agreement, he
understands that he is not to list such Prior Inventions in Exhibit A but is only
to disclose a cursory name for each such invention, a listing of the party(ies)
to whom it belongs and the fact that full disclosure as to such inventions has
not been made for that reason.  The Executive has also listed on Exhibit A all patents
and patent applications in which he is named as an inventor, other than those
which have been assigned to the Company (“Other Patent Rights”).  If
no such disclosure is attached, the Executive represents that there are no Prior
Inventions or Other Patent Rights.  If, in the course of his
employment with the Company, he incorporates a Prior Invention into a Company
product, process or machine or other work done for the Company, the Executive
hereby grants to the Company a nonexclusive, royalty-free, paid-up, irrevocable,
worldwide license (with the full right to sublicense) to make, have made,
modify, use, sell, offer for sale and import such Prior
Invention.  Notwithstanding the foregoing, the Executive will not
incorporate, or permit to be incorporated, Prior Inventions in any
Company-Related Development without the Company’s prior written
consent.

     

    (iii)           This
Agreement does not obligate the Executive to assign to the Company any
Development which, in the sole judgment of the Company, reasonably exercised, is
developed entirely on the Executive’s own time and does not relate to the
business efforts or research and development efforts in which, during the period
of his employment, the Company actually is engaged or reasonably would be
engaged, and does not result from the use of premises or equipment owned or
leased by the Company.  However, the Executive will also promptly
disclose to the Company any such Developments for the purpose of determining
whether they qualify for such exclusion.  The Executive understands
that to the extent this Agreement is required to be construed in accordance with
the laws of any state which precludes a requirement in an employee agreement to
assign certain classes of inventions made by an employee, this
paragraph  will be interpreted not to apply to any invention which a
court rules and/or the Company agrees falls within such classes.  The
Executive also hereby waives all claims to any moral rights or other special
rights which the Executive may have or accrue in any
Company-Related  Developments.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (e)           Enforcement of Intellectual
Property Rights.  The Executive will cooperate fully with the
Company, both during and after his employment with the Company, with respect to
the procurement, maintenance and enforcement of Intellectual Property Rights in
Company-Related Developments.  The Executive will sign, both during
and after the term of this Agreement,  all papers, including without
limitation copyright applications, patent applications, declarations, oaths,
assignments of priority rights, and powers of attorney, which the Company may
deem necessary or desirable in order to protect its rights and interests in any
Company-Related Development.  If the Company is unable, after
reasonable effort, to secure the Executive’s signature on any such papers, the
Executive hereby irrevocably designates and appoints each officer of the Company
as his agent and attorney-in-fact to execute any such papers on his behalf, and
to take any and all actions as the Company may deem necessary or desirable in
order to protect its rights and interests in any Company-Related
Development.

     

    (f)           Documents, Records,
etc.  All documents, records, data, apparatus, equipment and
other physical property, whether or not pertaining to Confidential Information,
which are furnished to the Executive by the Company or are produced by the
Executive in connection with the Executive’s employment will be and remain the
sole property of the Company.  The Executive will return to the
Company all such materials and property as and when requested by the
Company.  In any event, the Executive will return all such materials
and property immediately upon termination of the Executive’s employment for any
reason.  The Executive will not retain with the Executive any such
material or property or any copies thereof after such termination.

     

    (g)           Noncompetition and
Nonsolicitation.  During the Term and for 12 months thereafter,
the Executive (i) will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage,
participate, assist or invest in any Competing Business (as hereinafter
defined); (ii) will refrain from directly or indirectly employing, attempting to
employ, recruiting or otherwise soliciting, inducing or influencing any person
to leave employment with the Company (other than terminations of employment of
subordinate employees undertaken in the course of the Executive’s employment
with the Company); and (iii) will refrain from directly or indirectly calling
upon, soliciting or encouraging any customer, potential customer or supplier to
terminate or otherwise modify adversely its business relationship with the
Company.  The Executive understands that the restrictions set forth in
this Section 8(g) are intended to protect the Company’s interest in its
Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable and
appropriate for this purpose.  For purposes of this Agreement, the
term “Competing Business” shall mean a business conducted anywhere in the world
which develops, manufactures or markets any products, or performs any services
that are competitive with or similar to the products or services of the Company
or the products and services that the Company has under development or that are
the subject of active planning at any time during the employment of the
Executive.  Notwithstanding the foregoing, the Executive may own up to
one percent (1%) of the outstanding stock of a publicly held corporation which
constitutes or is affiliated with a Competing Business.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (h)           Third-Party Agreements and
Rights.  The Executive hereby confirms that the Executive is
not bound by the terms of any agreement with any previous employer or other
party which restricts in any way the Executive’s use or disclosure of
information or the Executive’s engagement in any business.  The
Executive represents to the Company that the Executive’s execution of this
Agreement, the Executive’s employment with the Company and the performance of
the Executive’s proposed duties for the Company will not violate any obligations
the Executive may have to any such previous employer or other
party.  In the Executive’s work for the Company, the Executive will
not disclose or make use of any information in violation of any agreements with
or rights of any such previous employer or other party, and the Executive will
not bring to the premises of the Company any copies or other tangible
embodiments of non-public information belonging to or obtained from any such
previous employment or other party.

     

    (i)           Litigation and Regulatory
Cooperation.  During and after the Executive’s employment, the
Executive shall cooperate fully with the Company in the defense or prosecution
of any claims or actions now in existence or which may be brought in the future
against or on behalf of the Company which relate to events or occurrences that
transpired while the Executive was employed by the Company.  The
Executive’s full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times.  During and after the Executive’s
employment, the Executive also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the
Company.  The Company shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 8(i).

     

    (j)           Injunction.  The
Executive agrees that it would be difficult to measure any damages caused to the
Company which might result from any breach by the Executive of the promises set
forth in this Section 8, and that in any event money damages would be an
inadequate remedy for any such breach.  Accordingly, subject to
Section 9 of this Agreement, the Executive agrees that if the Executive
breaches, or proposes to breach, any portion of this Agreement, the Company
shall be entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach
without showing or proving any actual damage to the Company.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    9.           Arbitration of
Disputes.  Any controversy or claim arising out of or relating
to this Agreement or the breach thereof or otherwise arising out of the
Executive’s employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
(“AAA”) in Boston, Massachusetts in accordance with the Employment Dispute
Resolution Rules of the AAA, including, but not limited to, the rules and
procedures applicable to the selection of arbitrators.  In the event
that any person or entity other than the Executive or the Company may be a party
with regard to any such controversy or claim, such controversy or claim shall be
submitted to arbitration subject to such other person or entity’s
agreement.  Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  This Section 9
shall be specifically enforceable. Notwithstanding the foregoing, this Section 9
shall not preclude either party from pursuing a court action for the sole
purpose of obtaining a temporary restraining order or a preliminary injunction
in circumstances in which such relief is appropriate; provided that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 9.

     

    10.           Consent to
Jurisdiction.  To the extent that any court action is permitted
consistent with or to enforce Section 9 of this Agreement, the parties hereby
consent to the jurisdiction of the Superior Court of the Commonwealth of
Massachusetts and the United States District Court for the District of
Massachusetts.  Accordingly, with respect to any such court action,
the Executive (a) submits to the personal jurisdiction of such courts; (b)
consents to service of process; and (c) waives any other requirement (whether
imposed by statute, rule of court, or otherwise) with respect to personal
jurisdiction or service of process.

     

    11.           Integration.  This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements including, but not
limited to that certain Employment Letter dated June 28, 2005 (the “Employment
Letter”) by and between the Company and the Executive, that certain amendment to
the Employment Letter dated June 20, 2005 and that certain Change in Control,
Bonus and Severance Agreement dated as of July 11, 2005 by and between the
Company and the Executive, between the parties concerning such subject
matter.

     

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

     

    13.           Successor to the
Executive.  This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal representatives, executors,
administrators, heirs, distributees, devisees and legatees.  In the
event of the Executive’s death after his termination of employment but prior to
the completion by the Company of all payments due him under 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).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    14.           Enforceability.  If
any portion or provision of this Agreement (including, without limitation, any
portion or provision of any section 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.

     

    15.           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.

     

    16.           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 a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Company or, in the case of
the Company, at its main offices, attention of the Board.

     

    17.           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.

     

    18.           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, without giving effect to the conflict of laws principles of such
Commonwealth.  With respect to any disputes concerning federal law,
such disputes shall be determined in accordance with the law as it would be
interpreted and applied by the United States Court of Appeals for the First
Circuit.

     

    19.           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.

     

    20.           Successor to
Company.  The Company shall 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 expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place.  Failure of
the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a material breach of this
Agreement.

     

    21.           Gender
Neutral.  Wherever used herein, a pronoun in the masculine
gender shall be considered as including the feminine gender unless the context
clearly indicates otherwise.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    IN WITNESS
WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.

     

    
      
        	 
      	
                ANIKA
      THERAPEUTICS, INC.

              
	 	 
	 	 
	 	 
	 
      	
                By:

              	 
      
	 
      	
                Its:

              	 
      
	 
      	 
      	 
      
	 	 	 
	 	 	 
	 	 	 
	 
      	
                EXECUTIVE

              
	 	 
	 	 
	 
      	 
      	 
      
	 
      	
                Kevin
      Quinlan

              


      

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

    


    To:           Anika
Therapeutics, Inc.

     

    From:       ____________________

     

    Date:       
____________________

     

    SUBJECT:                                Prior Inventions

     

    The following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
the Company that have been made or conceived or first reduced to practice by me
alone or jointly with others prior to my engagement by the Company:

     

    
      
        	 
      	
                o

              	
                No
      inventions or improvements

              
	 	 	 
	 
      	
                o

              	
                See
      below:

              
	 
      	 
      	
                _______________________________________________________________

              
	 
      	 
      	
                _______________________________________________________________

              
	 
      	 
      	
                _______________________________________________________________

              
	 	 	 
	 
      	
                o

              	
                Additional
      sheets attached

              


      

    

     

    
      The following
is a list of all patents and patent applications in which I have been named as
an inventor:

       

      
        	 	
                o

              	
                None

              
	 	 	 
	 
      	
                o

              	
                See
      below:

              
	 
      	 
      	
                _______________________________________________________________

              
	 
      	 
      	
                _______________________________________________________________

              
	 
      	 
      	
                _______________________________________________________________