Document:

Exhibit 10.3

 

ANIKA

THERAPEUTICS, INC.

 

Change

in Control, Bonus and Severance Agreement

 

 

AGREEMENT made as

of July 8, 2002 by and among Anika Therapeutics, Inc., a Massachusetts

corporation with its principal place of business in Woburn, Massachusetts (the

“Company”), and William J. Knight of Boxford, Massachusetts (the “Executive”),

an individual presently employed as the Chief Financial Officer, Vice President

of Finance, Treasurer and Clerk 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 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 Company

 

2

 

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

 

3

 

(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.

 

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

 

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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 June 27,

2002 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.

 

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.

 

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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/ William J. Knight

  
	

   

  	

  William J. KnightExhibit 10.4

 

ANIKA

THERAPEUTICS, INC.

 

First

Amended and Restated

Change

in Control, Bonus and Severance Agreement

 

 

FIRST AMENDMENT

AND RESTATEMENT, dated as of July 8, 2002 to that certain AGREEMENT made as of

April 26, 2000 by and among Anika Therapeutics, Inc., a Massachusetts

corporation with its principal place of business in Woburn, Massachusetts (the

“Company”), and Charles H. Sherwood of Sudbury, Massachusetts (the

“Executive”), an individual presently employed as the President and Chief

Executive Officer 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 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

 

2

 

(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 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 management responsibilities for the

business conducted by the Company 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

 

3

 

(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

 

(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 one hundred percent (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 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.

 

4

 

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.

 

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

 

5

 

the controversy or

claim is not resolved within 90 days, the parties shall be free to pursue other

legal remedies in law or equity.

 

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: 

(A)  that certain Employment

Letter dated April 15, 1998 by and between the Company and the Executive, (the

“Employment Letter”), shall govern any termination of the Executive’s

employment with the Company (i) prior to the effective date of a Change in

Control or (ii) following the expiration of twelve (12) months after a

Change in Control; this Agreement shall govern in the event of any termination

of Executive’s employment with the Company within twelve (12) months after a

Change in Control; and (B) that certain Non-Disclosure and Non-Competition

Agreement of May 4, 1998 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

 

6

 

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.

 

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.

 

7

 

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/ William J.

  Knight

  	

   

  
	

   

  	

   

  	

  Name: 

  	

  William J. Knight

  
	

   

  	

   

  	

  Title: 

  	

  Chief Financial

  Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  EXECUTIVE:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  /s/ Charles H. Sherwood

  	

   

  
	

   

  	

  Charles H. Sherwood

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