Dr.
Sherwood’s Employment Agreement provides him with an initial annual base salary
of $428,480, subject to annual review by either the Board of Directors or the
Compensation Committee. In addition, Dr. Sherwood is eligible to
receive cash incentive compensation, starting at 50% of his annual base
salary.
Mr.
Quinlan’s Employment Agreement provides him with an initial annual base salary
of $261,888, subject to annual review by either the Board of Directors or the
Compensation Committee. In addition, Mr. Quinlan is eligible to
receive cash incentive compensation, starting at 30% of his annual base
salary.
Dr.
Sherwood and Mr. Quinlan are eligible to participate in or receive benefits
under all of the Company’s employee benefit plans or any future arrangements
made available by the Company to its executives.
Pursuant
to the terms of the Employment Agreements, upon any termination, whether due to
death, disability, or for any reason by Dr. Sherwood or Mr. Quinlan, as the case
may be, or the Company, each of Dr. Sherwood and Mr. Quinlan would be
entitled to any accrued benefits, including any earned but unpaid base
salary and incentive compensation, unpaid expense reimbursements, accrued but
unused vacations, and any vested benefits under the Company’s employee benefit
plans.
Subject to
certain conditions, upon an involuntary termination by the Company of Dr.
Sherwood’s employment without “cause” (as defined in his Employment Agreement)
or a voluntary termination of employment by Dr. Sherwood for “good reason” (as
defined in his Employment Agreement), Dr. Sherwood would be entitled to receive
a severance amount equal to 1.5 times the sum of his current base salary and
target annual bonus for the then current fiscal year and would be eligible to
continue to participate in the Company’s group health, dental and vision program
for 18 months.
If Dr.
Sherwood’s termination of employment occurs within 3 months prior to or 12
months after a “change in control” (as defined in his Employment Agreement) and
such termination is either by him for “good reason” or by the Company without
“cause,” (i) Dr. Sherwood would be entitled to receive, in lieu of the severance
amount described in the immediately preceding paragraph, a severance amount
equal to two times the sum of his current base salary and target annual bonus
for the then current fiscal year, (ii) all of Dr. Sherwood’s stock options and
stock-based awards would immediately accelerate and become fully exercisable or
nonforfeitable as of the effective date of such change in control, and (iii) Dr.
Sherwood would be eligible to continue to participate in the Company’s group
health, dental and vision program for 24 months, subject to certain
conditions.
Under the
terms of his Employment Agreement with the Company, Dr. Sherwood would receive a
gross-up payment that, on an after-tax basis, is equal to the taxes imposed on
the severance payments under his Employment Agreement in the event any payment
or benefit to the executive is considered an “excess parachute payment” and
subject to an excise tax under the Internal Revenue
Code. Notwithstanding the foregoing, the amount of gross-up payment
that Dr. Sherwood would be entitled to receive decreases over time, as more
fully described in his Employment Agreement.
Subject to
certain conditions, upon an involuntary termination by the Company of Mr.
Quinlan’s employment without “cause” (as defined in the Employment Agreement) or
a voluntary termination of employment by him for “good reason” (as defined in
the Employment Agreement), Mr. Quinlan would be entitled to receive a severance
amount equal to his current base salary for the then current fiscal year and
would be eligible to continue to participate in the Company’s group health,
dental and vision program for 12 months.
If Mr.
Quinlan’s termination of employment occurs within 3 months prior to or 12 months
after a “change in control” (as defined in the Employment Agreement) and such
termination is either by him for “good reason” or by the Company without
“cause,” (i) Mr. Quinlan would be entitled to receive, in lieu of the severance
amount described in the immediately preceding paragraph, a severance amount
equal to 1.5 times the sum of his current base salary and target annual bonus
for the then current fiscal year, (ii) all of Mr. Quinlan’s stock options and
stock-based awards would immediately accelerate and become fully exercisable or
nonforfeitable as of the effective date of such change in control, and (iii) Mr.
Quinlan would be eligible to continue to participate in the Company’s group
health, dental and vision program for 18 months, subject to certain
conditions.
Under the
terms of his Employment Agreement, Mr. Quinlan would receive a modified economic
cutback gross-up payment in the event any payment or benefit to him is
considered an “excess parachute payment” and subject to an excise tax under the
Internal Revenue Code.
In
addition, Dr. Sherwood and Mr. Quinlan are subject to confidentiality,
non-disclosure, non-competition, non-solicitation, assignment, and arbitration
provisions.
The
foregoing description of the Employment Agreements with each of Dr. Sherwood and
Mr. Quinlan does not purport to be complete and is qualified in its entirety by
reference to the text of the Employment Agreements, which are attached as
Exhibits 10.1 and 10.2, respectively, to this Form 8-K and incorporated herein
by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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ANIKA
THERAPEUTICS, INC.
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Dated:
October 22, 2008
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By:
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/s/
KEVIN W. QUINLAN
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Kevin
W. Quinlan
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Chief
Financial Officer
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