On May 28, 2024, Anika Therapeutics, Inc. (the “Company”) entered into a Cooperation Agreement (the “Cooperation Agreement”) with Caligan Partners LP, Caligan Partners Master Fund LP and David Johnson (collectively with each of their respective affiliates and associates, the “Investor Group”).
Pursuant to the Cooperation Agreement, the Company has agreed to increase the size of the Board of Directors (the “Board”) to ten directors and appoint William Jellison as an independent Class I director and Joseph Capper as an independent Class II director to fill such vacancies with terms expiring at the Company’s 2024 annual meeting of stockholders (the “2024 Annual Meeting”) and 2025 annual meeting of stockholders, respectively. The Company has also agreed to nominate and support Mr. Jellison for election at the 2024 Annual Meeting, subject to the Board’s fiduciary duties under applicable law. Each of Mr. Jellison and Mr. Capper will be appointed to the Capital Allocation Committee of the Board and the Capital Allocation Committee will be set at five directors, subject to the Board’s fiduciary duties under applicable law. Following the 2024 Annual Meeting, the size of the Board will be decreased to nine directors and the Company has agreed to limit the size of the Board to no more than nine directors during the Standstill Period (as defined below), subject to the Board’s fiduciary duties under applicable law.
In addition, the Company has agreed to implement a share repurchase program, subject to market conditions, applicable legal requirements, including the insider trading provisions of U.S. securities law, and other relevant factors, for an aggregate purchase price equal to $40,000,000 to occur by June 30, 2026 as follows: (i) $15,000,000 to be effected through a Rule 10b5-1 compliant trading plan initiated no later than 5:00 p.m. Eastern Daylight Time on May 31, 2024 and to be effective through June 30, 2025, and (ii) the remaining amount to be purchased in the open market. In the event of positive “free cash flow” (as defined in the Cooperation Agreement) for the period from July 1, 2024 to June 30, 2025, the amount under the share repurchase program shall be increased by fifty percent (50%) of such positive amount and in no event shall the Company be required to make any purchases in the event that the Company’s cash would be less than $45,000,000 after taking into account the share repurchase and reasonably anticipated capital expenditures and restructuring costs. This new buyback authorization replaces the Company’s share repurchase program announced in April 2023.
Under the Cooperation Agreement, the Investor Group has agreed to certain voting commitments. Commencing on the date of the Cooperation Agreement and ending on the date that is thirty calendar days prior to the notice deadline under the Company’s bylaws for stockholders to submit stockholder nominations for election to the Board at the Company’s 2025 annual meeting of stockholders (such period, the “Standstill Period”), the Investor Group has agreed to appear in person or by proxy at each meeting of the Company’s stockholders and to vote all of its shares of the Company’s common stock in accordance with the Board’s recommendation with respect to the election, removal and/or replacement of directors and any other proposal that is submitted to the stockholders of the Company for their vote, other than a proposal with respect to an amendment to the Company’s 2017 Omnibus Incentive Plan or an Extraordinary Transaction (as defined therein).
During the Standstill Period, the Investor Group has also agreed to certain standstill provisions, including, among other things, agreeing not to, subject to certain exceptions, (i) acquire cumulative ownership (directly or indirectly) of more than 9.7% of the Company’s outstanding common stock, (ii) transfer its shares of common stock to any third party that would result in such third party owning more than 4.9% of the Company’s outstanding common stock, (iii) nominate or recommend for nomination any person for election to the Board, (iv) make or be the proponent of any stockholder proposal, (v) engage in any solicitation of proxies or consents with respect to any matter or proposal, (vi) initiate or participate in any tender or exchange offer, merger, consolidation or other extraordinary transaction involving the Company, (vii) subject any voting securities of the Company to any voting arrangement or agreement, or (viii) acquire or engage in any transaction involving synthetic equity interests or short interests in the Company.
The Company and the Investor Group have also agreed to certain non-disparagement and no-litigation provisions, subject to certain exceptions, and provisions permitting the Investor Group the opportunity to meet quarterly with the Capital Allocation Committee and management.
The foregoing summary of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Cooperation Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
