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Item 5.02.
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Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Effective
November 26, 2018, Abeona Therapeutics, Inc. (the “Company”) terminated the employment of Frank Carsten Thiel,
Ph.D., its Chief Executive Officer. The termination by the Company was “for Cause” pursuant to the terms of the
Employment Agreement, dated March 29, 2018, between the Company and Dr. Thiel (the “Employment Agreement”). In
addition, on November 27, 2018, Dr. Thiel resigned as a member of the Board of Directors of the Company (the
“Board”), effective immediately. Dr. Thiel’s termination and resignation were due to conduct violating the
Company’s Code of Business Conduct and Ethics and not related to the condition of the Company’s
finances, operations or clinical programs, nor due to any disagreement with the Company regarding its management of
financial reporting, scientific data or other practices. On November 29, 2018, Dr. Thiel and the Company entered into a
separation agreement (the “Separation Agreement”) providing that he will only be entitled to receive, as of the
effective date of termination, Accrued Amounts and will recieve reimbursement for continuing medical benefits under COBRA for
six months or until he obtains health benefits through new employment, whichever is sooner, but will not otherwise be eligible
for any Annual Bonus or Severance Amount (each as defined in the Employment Agreement). The foregoing summary of the
Separation Agreement does not purport to be complete and is subject to, and qualified in its entirety by the full text of the
Separation Agreement, which is filed herewith as Exhibit 10.3.
Effective
November 26, 2018, the Board appointed João Siffert, M.D., 54, the Company’s Head of Research and Development
and Chief Medical Officer, to serve as Interim Chief Executive Officer. Dr. Siffert will continue to oversee research and
development while serving as Interim Chief Executive Officer. It is anticipated that Dr. Siffert will serve as Interim
Chief Executive Officer until the election by the Board of a permanent chief executive officer.
In connection
with his appointment as Interim Chief Executive Officer, Dr. Siffert and the Company entered into an agreement (the
“Amendment”) providing that he will receive an increased annualized salary of $550,000 (the “Interim Base
Salary”) in respect of a six-month period during which he is expected to serve in this position (the “Interim
Period”), commencing November 26, 2018. Other than the Interim Base Salary, Dr. Siffert’s current agreement with
the Company, dated September 28, 2018 (the “Current Agreement”), will remain in place during the Interim Period.
Pursuant to the terms of the Current Agreement, Dr. Siffert will receive (i) a target bonus of 45% of his regular base
salary, $450,000, (ii) a sign-on bonus in the aggregate amount of $190,000, (iii) a grant of an initial option to purchase
180,000 shares of the Company’s common stock, which option will vest over a 48 month period, with 25% vesting on the
one-year anniversary of the date of grant and the remaining 75% vesting in 36 equal monthly installments thereafter, and (iv)
a subsequent grant of an option to purchase 60,000 shares of the Company’s common stock, which option will vest over a
48 month period with 25% vesting on the one-year anniversary of the date of grant and the remaining 75% vesting in 36
equal monthly installments thereafter. The foregoing summaries of the Current Agreement and the Amendment do not purport to
be complete and are subject to, and qualified in their entirety by the full text of these agreements, which are filed
herewith as Exhibits 10.1 and 10.2, respectively.
Dr. Siffert does
not have any family relationship with any member of the Board or any executive officer of the Company. Information about Dr.
Siffert’s business experience can be found in the press release attached as Exhibit 99.1 hereto, which biographical
information contained in paragraph 5 thereof is incorporated into this Item 5.02 by reference. Aside from the Amendment
described in the preceding paragraph, there are no arrangements or understandings between Dr. Siffert and any other
person pursuant to which he was appointed to serve as the Company’s Interim Chief Executive Officer.
Dr. Siffert will not
serve on the Board of Directors during his tenure as Interim Chief Executive Officer.