Exhibit 10.1

 

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VIA ELECTRONIC MAIL AND HAND DELIVERY

 

January 2, 2020

 

Steven H. Rouhandeh

 

 

 

Dear Steven:

 

This letter of agreement and general release (“Agreement”) confirms our mutual
agreement regarding the terms and conditions of your separation from employment
with Abeona Therapeutics, Inc. (the “Company”). You and the Company agree as
follows:

 

1. Separation Date; Transition Period - Provided you sign this Agreement, your
effective date of separation from the Company will be March 31, 2020 (the
“Separation Date”), unless your employment is terminated earlier as addressed
below. The period between the date of this Agreement and the Separation Date
will be a transition period (the “Transition Period”), during which time you
agree to reasonably assist the Company with the transition of your job duties
and to perform any other transition duties as may be reasonably requested by the
Company (it being understood and agreed that such assistance will not require
any travel or a material amount of your time) (collectively, the “Transition
Duties”). The Company shall maintain, at the Company’s cost and expense, your
current level of benefits (health/medical and any other applicable benefits) and
salary at all times during the Transition Period.

 

2. Compensation/Severance Benefits

 

  (a)

On the Separation Date, the Company will pay you any unpaid base salary through
the Separation Date, any accrued unused vacation days, additional vested
benefits (if any) in accordance with the applicable terms of applicable Company
arrangements, and any unreimbursed expenses in accordance with the Company’s
business expense reimbursement policies (collectively, the “Accrued Amounts”).

 

   

 

 

  (b)

In addition to the Accrued Amounts, you will be entitled to: (i) a payment equal
to the sum of your current base salary plus your target annual bonus for the
year ended December 31, 2019, which is fifty percent (50%) of your current base
salary (such amount, the “Severance Amount”); (ii) a payment equal to the
premiums that you would pay if you elected continued health coverage under the
Company’s health plan for you and your eligible dependents for the twenty four
(24) month period following the Separation Date, less the applicable active
employee rate, which premiums will be calculated based on the rate determined
under the COBRA rate in effect on the Separation Date (“Medical Benefit
Payment”); (iii) an annual bonus for the year ended December 31, 2019 in an
amount equal to any annual bonus payable to the Company’s Chief Executive
Officer for such year, (iv) a pro-rata annual bonus for the year ending December
31, 2020 in an amount equal to the annual bonus amount payable to the Chief
Executive Officer for such year, multiplied by a fraction, the numerator of
which is the number of days during which you were employed by the Company in the
year in which the Separation Date occurs and the denominator of which is three
hundred sixty-five (365); (v) an option grant prior to the Separation Date in an
amount, and with the same terms, as any option granted to the Company’s Chief
Executive Officer prior to the Separation Date, and (vi) accelerated vesting
equivalent to twenty-four (24) months of continued service to the Company,
whether as an employee, a member of the Board of Directors or, at the discretion
of the Company, as a consultant, from the date you are no longer providing any
such service to the Company (disregarding such termination for such purpose),
with respect to all unvested equity and any other long-term incentive awards
granted to you and then outstanding on such date, including any awards made on
or after January 1, 2020; provided, that, any delays in the settlement or
payment of such awards that are set forth in the applicable award agreement and
that are required under Section 409A of the Internal Revenue Code, as amended
(the “Code”), and the Treasury Regulations thereunder (“Section 409A”) shall
remain in effect. The Company’s obligations to make the payments and provide the
benefits set forth in (i) – (vi) in this Paragraph shall be conditioned upon
your continued compliance with your obligations under Section 3 below and your
execution and nonrevocation of a release of claims in favor of the Company and
its affiliates in the form substantially similar to Attachment A (the “Final
Release”).

 

Notwithstanding any provision to the contrary herein, and without limitation of
any remedies to which the Company may be entitled, (A) the Severance Amount
shall be paid in installments in accordance with the Company’s regular payroll
practices during a twelve (12) month period commencing within sixty (60) days
following the Separation Date (with the first such payment to include all
installment amounts from the Separation Date), (B) the Medical Benefit Payment
will be made in a lump sum within sixty (60) days following the Separation Date,
(C) the annual bonus for the year ended December 31, 2019 shall be paid to you
in the ordinary course at the same time annual bonuses are paid to other senior
executives, but in no event later than March 15, 2020, and (D) the pro-rated
annual bonus for the year ending December 31, 2020 shall be paid to you in the
ordinary course at the same time annual bonuses are paid to other senior
executives, but in no event later than March 15, 2021; provided, that, the
Release is effective.

 

3. Release – In consideration of your continued employment with the Company
through the Transition Period and your eligibility to receive payment of the
severance benefits described in Paragraph 2, both of which you acknowledge you
would not otherwise be entitled to receive, you waive, subject to Paragraph 3a
below, all claims available under federal, state or local law against the
Company and the directors, officers, employees, employee benefit plans and
agents of the Company arising out of your employment with the Company or the
termination of that employment, including but not limited to all claims arising
under the Americans with Disabilities Act, the Age Discrimination in Employment
Act, the Civil Rights Act of 1991, the Employee Retirement Income Security Act
(“ERISA”), the Equal Pay Act, the Genetic Information Non-discrimination Act,
the Family and Medical Leave Act, Section 1981 of U.S.C, Title VII of the Civil
Rights Act; the New York State Human Rights Law, the New York State Executive
Law, the New York State Civil Rights Law, the retaliation provisions of the New
York State Workers’ Compensation Law, the New York Labor Law, the New York City
Human Rights Law, and the New York City Administrative Code; as well as wrongful
termination claims, breach of contract claims, discrimination claims, harassment
claims, retaliation claims, whistleblower claims (to the fullest extent they may
be released under applicable law), defamation or other tort claims, and claims
for attorneys’ fees and costs.

 

  a. The only claims not being waived, released and discharged by this Agreement
are (i) those that relate to your rights and remedies under this Agreement, (ii)
any rights to indemnification exculpation and/or contribution to which you are
entitled as of the date hereof pursuant to the Company’s and its affiliates
organizational documents, any indemnification or similar agreement or applicable
law (and any rights under any insurance policies of the Company or its
affiliates), and (iii) those that cannot be waived as a matter of applicable
law; any claims you may have to government-sponsored and administered benefits
such as unemployment insurance, workers’ compensation insurance (excluding
claims for retaliation under workers’ compensation laws), state disability
insurance and paid family leave insurance benefits; and any benefits that vested
on or prior to the Separation Date pursuant to a written benefit plan sponsored
by the Company and governed by the ERISA.

 

   

 

 

  b. Nothing in this Agreement prevents you from filing a charge with,
cooperating with, or participating in any proceeding before the Equal Employment
Opportunity Commission or a state fair employment practices agency (except that
you acknowledge that you may not recover any monetary benefits or personal
relief in connection with any such claim, charge or proceeding).         c. You
hereby represent that you have not instituted, assisted or otherwise
participated in connection with, any action, complaint, claim, charge,
grievance, arbitration, lawsuit or administrative agency proceeding, or action
at law or otherwise against the Company or any other member of the Company or
any of their respective shareholders, officers, employees, directors,
shareholders or agents.

 

4. Post-Separation Obligations/Non-Disparagement - Subject to Paragraph 5, you
acknowledge and reaffirm your obligation to keep confidential and not to
disclose any and all non-public information concerning the Company that you
acquired during the course of your employment with the Company, including, but
not limited to, any non-public information concerning the Company’s business
affairs, business prospects and financial condition. You agree that you will not
make any public statement intended to disparage the Company. The Company agrees
that it will not issue or authorize any public statement intended to disparage
you.     5. Disclosure Exceptions - Nothing in this Agreement or the Final
Release shall prohibit or restrict you from lawfully (A) initiating
communications directly with, cooperating with, providing information to,
causing information to be provided to, or otherwise assisting in an
investigation by any governmental or regulatory agency, entity, or official(s)
(collectively, “Governmental Authorities”) regarding a possible violation of any
law; (B) responding to any inquiry or legal process directed to you individually
(and not directed to the Company and/or its subsidiaries) from any such
Governmental Authorities; (C) testifying, participating or otherwise assisting
in an action or proceeding by any such Governmental Authorities relating to a
possible violation of law; or (D) making any other disclosures that are
protected under the whistleblower provisions of any applicable law.
Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, you
shall not be held criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that: (a) is made (i) in
confidence to a federal, state, or local government official, either directly or
indirectly, or to an attorney; and (ii) solely for the purpose of reporting or
investigating a suspected violation of law; or (b) is made to your attorney in
relation to a lawsuit for retaliation against you for reporting a suspected
violation of law; or (c) is made in a complaint or other document filed in a
lawsuit or other proceeding, if such filing is made under seal. Nor does this
Agreement require you to obtain prior authorization from the Company before
engaging in any conduct described in this paragraph, or to notify the Company
that you have engaged in any such conduct.     6. Amendment - This Agreement and
the Final Release shall be binding upon the parties and may not be modified in
any manner, except by an instrument in writing of concurrent or subsequent date
signed by the parties hereto or their duly authorized representatives. This
Agreement and the Final Release are binding upon and shall inure to the benefit
of the parties and their respective agents, assigns, heirs, executors,
successors and administrators.     7. Confidentiality of this Agreement -
Subject to Paragraph 5, you understand and agree that in exchange for the
consideration set forth above, both during the Transition Period and thereafter,
the terms and conditions of this Agreement, the Final Release, and the contents
of any negotiations and discussions resulting in this Agreement and the Final
Release, shall be maintained as confidential by you and your agents and
representatives and shall not be disclosed to any third party except (i) to the
extent required by federal or state law or otherwise agreed to in writing by the
Company or (ii) in connection with the enforcement of your rights under this
Agreement; provided that you and the Company shall be entitled to make third
parties (including your prospective employers) aware of this Agreement and your
obligations under this Agreement (including those set forth in Paragraph 14
hereof).

 

   

 

 

8. Nature of Agreement - You understand and agree that this Agreement and the
Final Release represent a severance agreement and do not constitute an admission
of liability or wrongdoing on the part of the Company.    

9.

Acknowledgments - You acknowledge that you are being provided at least
twenty-one (21) days to consider this Agreement, including all attachments
hereto, and that the Company hereby advises you to consult with an attorney of
your own choosing prior to signing this Agreement. You understand that you may
revoke this Agreement for a period of seven (7) days after execution, and the
Agreement shall not be effective or enforceable until the expiration of this
seven (7) day period. You understand and agree that by entering into this
Agreement you are waiving any and all rights or claims you may have under the
Age Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act, and that you have received consideration beyond that to which
you were previously entitled. You agree that changes to this Agreement, whether
material or immaterial, do not restart the running of the 21-day consideration
period.     10. Taxes – All payments hereunder will be subject to applicable
deductions and withholdings. You shall bear all expense of, and be solely
responsible for, all federal, state and local taxes due with respect to any
payment received under this Agreement. This Agreement shall be interpreted to
avoid any penalty sanctions under Section 409A. If any payment or benefit cannot
be provided or made at the time specified herein without incurring sanctions
under Section 409A, then such benefit or payment shall be provided in full (to
extent not paid in part at earlier date) at the earliest time thereafter when
such sanctions will not be imposed. For purposes of Section 409A, all payments
to be made upon a termination of employment under this Agreement may only be
made upon the your “separation from service” (within the meaning of such term
under Section 409A) and each payment made under this Agreement shall be treated
as a separate payment. In no event shall you, directly or indirectly, designate
the calendar year of payment, except as permitted under Section 409A. The
Company will assist you by preparing an analysis under IRS Code Section 1202 to
determine which, if any, of your shares qualify for tax treatment under Section
1202.     11. Further Cooperation – You agree that, during and after the term of
this Agreement, you will make yourself available, upon reasonable notice and
under reasonable conditions, to assist the Company in any capacity with respect
to matters of which you were involved or had knowledge while employed by the
Company. To that end, you agree to cooperate with the Company in connection with
any pending or future investigation or pending or threatened litigation matters,
lawsuits or administrative proceedings in which the Company believes you are an
individual with knowledge concerning the subject thereof. In particular, but
without limitation, you agree to make yourself available for meetings,
interviews, depositions, and court appearances, as reasonably requested by the
Company, and to otherwise reasonably assist the Company in connection with any
such investigation or litigation, or other proceedings. You also agree to
provide the Company with any and all documents which may be in your possession
that may concern the subject matter of any pending or future investigation or
litigation. You understand that the Company will reimburse you for all
reasonable, documented out-of-pocket expenses incurred as a result of my
obligations under this paragraph in accordance with the Company’s
then-applicable Expense Guidelines.     12. Exercise of Stock Options – You
understand that you are not entitled to any future grants of stock or stock
options. In accordance with the Stock Option Agreement and Prospectus, you
understand that up to and including the Separation Date, all stock options that
have vested as of the Separation Date, if any, must be exercised by the earlier
of 24 months of the Separation Date or the expiration of the option. You further
understand that following the Separation Date, all stock options that vested as
of the Separation Date, if any, must be exercised within 24 months of the
Separation Date. You further understand that upon death or disability, all stock
options that have vested as of the Separation Date, if any, must be exercised
within twenty-four months of said death or disability.     13. Agreement Not to
Seek Rehire – You agree that, without prior written Company approval, you will
not seek or accept employment with the Company (including all subsidiaries and
affiliates), including assignment to or on behalf of the Company as an
independent contractor or through any third party, and the Company has no
obligation to consider you for any future employment or assignment.

 

   

 

 

14. Restrictive Covenants

 

  (a) Non-Competition – In consideration for the promises made by the Company
herein, you agree that you shall not, during the 47 week period after the
Separation Date (the “Restriction Period”), directly or indirectly, own, manage,
operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner with,
including, without limitation, holding any position as a stockholder, director,
officer, consultant, independent contractor, employee, partner, or investor in,
any Restricted Enterprise (as defined below); provided, that in no event shall
ownership by you of two percent (2%) or less of the outstanding securities of
any class of any issuer whose securities are registered under the Securities
Exchange Act of 1934, as amended, standing alone, be prohibited by this
Paragraph 14, so long as you do not have, or exercise, any rights to manage or
operate the business of such issuer other than rights as a stockholder thereof.
For purposes of this paragraph, “Restricted Enterprise” shall mean any person or
entity that, on the Separation Date, is engaged, directly or indirectly, in a
business of developing or commercializing biopharmaceutical therapies for those
therapeutic indications that the Company or its subsidiaries has either
commercialized products or programs in pre-clinical or clinical development or
has undertaken material efforts to so engage on the Separation Date, in any
country or territory in which on the Separation Date the Company or any of its
affiliates markets any of its services or products or has material plans to
begin marketing any of its services or products in such country or territory;
provided, that if such business of any such person or entity which otherwise
would be a Restricted Enterprise is immaterial to the other businesses of such
person or entity and part of a separate division or subsidiary from that which
you are then employed, then such person or entity shall not be deemed to be a
Restricted Enterprise.         (b) Non-Solicitation of Employees – During the
Restriction Period, you shall not directly or indirectly, hire, contact,
recruit, induce or solicit (or assist any person to hire, contact, induce or
solicit) for employment or other services any person who is, or within twelve
(12) months prior to the date of such hiring, contacting, inducing or
solicitation was, an employee, independent contractor, or consultant of the
Company or any of its subsidiaries. For purposes of this Paragraph 14,
independent contractors and consultants refer to such persons, companies, or
entities that on or prior to the Separation Date performed services related to
the business of the Company.         (c) Non-Solicitation of Customers – During
the Restriction Period, you shall not directly or indirectly, solicit, contact
(including but not limited to e-mail, regular mail, express mail, telephone,
fax, and instant message), attempt to contact, or meet with the Company’s
current, former, or prospective customers for purposes of offering or accepting
goods or services for Restricted Enterprises or cause any such customer to
terminate or diminish their commercial relationship with the Company. For
purposes of this Agreement, a “prospective customer” is any person or entity
with whom the Company is or was engaged in material communications with respect
to potential business transactions at the time of employment termination or six
(6) months prior to date of the Termination Date.

 

15. Entire Agreement – This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby
and supersedes and replaces any express or implied prior agreement with respect
to the terms of your employment and the termination thereof which you may have
had with the Company (including, without limitation, the Retention Agreement
(other than Section 3 thereof, which will remain in full force and effect)).
This Agreement may be amended only by a written document signed by the parties
hereto.     16. Voluntary Assent – You affirm that you have read this Agreement,
and understand all of its terms, including the full and final release of claims
set forth in Paragraph 3. You further acknowledge that you have voluntarily
entered into this Agreement; that you have not relied upon any representation or
statement, written or oral, not set forth in this Agreement; that the only
consideration for signing this Agreement is as set forth herein; and that this
document gives you the opportunity and encourages you to have this Agreement
reviewed by your attorney and/or tax advisor.

 

   

 

 

17. Waiver – The failure of either party to this Agreement to enforce any of its
terms, provisions or covenants will not be construed as a waiver of the same or
of the right of such party to enforce the same. Waiver by either party hereto of
any breach or default by the other party of any term or provision of this
Agreement will not operate as a waiver of any other breach or default.     18.
Severability – In the event that any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remainder of this Agreement will not in any way be affected or impaired
thereby. If any provision of this Agreement is held to be excessively broad as
to duration, activity or subject, such provision will be construed by limiting
and reducing it so as to be enforceable to the maximum extent allowed by
applicable law.     19. Counterparts – This Agreement may be executed in one or
more counterparts, which together will constitute one and the same agreement.  
  20. Notices – All notices, demands, requests or other communications which may
be or are required to be given, served, or sent by a party pursuant to this
Agreement shall be in writing and shall be hand delivered (including delivery by
courier), mailed by first-class, registered or certified mail, return-receipt
requested, postage prepaid, or transmitted by telegram, telex or facsimile
transmission, addressed as follows:

 

If to the Company:

 

Abeona Therapeutics

1330 Avenue of the Americas

New York, NY 10019

Attention: Kristina Maximenko, HR

Telephone: (781) 267-4056

Email: kmaximenko@abeonatherapeutics.com

 

If to you:

 

At your address on file with the Company.

 

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent

 

21. Applicable Law - This Agreement shall be governed by the laws of New York
without reference to that jurisdiction’s choice of law rules.

 

If you have any questions about the matters covered in this Agreement, please
contact me at (203) 747 0604.

 

Very truly yours,

    Abeona Therapeutics, Inc.         By: /s/ Mark J. Alvino   Name: Mark J.
Alvino   Title: Chair, Compensation Committee  

 

I hereby agree to the terms and conditions set forth above. I intend that this
Agreement become a binding agreement between me and the Company. I further
understand that payment of the consideration and other benefits described herein
is conditioned upon my timely execution, return and non-revocation of this
Agreement and the Final Release.

 

By: /s/ Steven H. Rouhandeh   Date: January 2, 2020    Steven H. Rouhandeh    

 

   

 

 

ATTACHMENT A

 

FINAL RELEASE OF CLAIMS

 

  1. Release - In consideration of the severance benefits set forth in the
Agreement to which this Final Release of Claims (the “Final Release”) is
attached, which you acknowledge you would not otherwise be entitled to receive,
you waive, subject to the exceptions specified below, all claims available under
federal, state or local law against the Company and the directors, officers,
employees, employee benefit plans and agents of the Company arising out of your
employment with the Company or the termination of that employment, including but
not limited to all claims arising under the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Civil Rights Act of 1991, the Employee
Retirement Income Security Act (“ERISA”), the Equal Pay Act, the Genetic
Information Non-discrimination Act, the Family and Medical Leave Act, Section
1981 of U.S.C, Title VII of the Civil Rights Act; the New York State Human
Rights Law, the New York State Executive Law, the New York State Civil Rights
Law, the retaliation provisions of the New York State Workers’ Compensation Law,
the New York Labor Law, the New York City Human Rights Law, and the New York
City Administrative Code; as well as wrongful termination claims, breach of
contract claims, discrimination claims, harassment claims, retaliation claims,
whistleblower claims (to the fullest extent they may be released under
applicable law), defamation or other tort claims, and claims for attorneys’ fees
and costs.

 

The only claims not being waived, released and discharged by this Final Release
are (i) those that relate to your rights and remedies under this Agreement, (ii)
any rights to the indemnification exculpation and/or contribution to which you
are entitled as of the date hereof pursuant to the Company’s and its affiliates
organizational documents, any indemnification or similar agreement or applicable
law (and any rights under the insurance policies of the Company or its
affiliates) and (iii) those that cannot be waived as a matter of applicable law;
any claims you may have to government-sponsored and administered benefits such
as unemployment insurance, workers’ compensation insurance (excluding claims for
retaliation under workers’ compensation laws), state disability insurance and
paid family leave insurance benefits; and any benefits that vested on or prior
to the Separation Date pursuant to a written benefit plan sponsored by the
Company and governed by ERISA.

 

Nothing in this Final Release prevents you from filing a charge with,
cooperating with, or participating in any proceeding before the Equal Employment
Opportunity Commission or a state fair employment practices agency (except that
you acknowledge that you may not recover any monetary benefits in connection
with any such claim, charge or proceeding).

 

  2. Business Expenses and Compensation - You acknowledge that you have been
reimbursed by the Company for all business expenses incurred in conjunction with
the performance of your employment and that no other reimbursements are owed to
you. You further acknowledge that you have received payment in full for all
services rendered in conjunction with your employment by the Company and that no
other compensation is owed to you except as provided in the Agreement.        
3. Return of Company Property - You agree that you have returned all Company
property, including but not limited to keys, ID card, cell phone, PDA, thumb
drive, and Company documents and information (either hard copy or electronic)
other than records related solely to your own compensation or benefits. To the
extent you have any Company material or information stored on any personal
electronic devices, you represent and warrant that you have destroyed all such
information currently known to you (subject to any litigation preservation
directive then in effect) and that you will cooperate with the Company to ensure
the return and permanent deletion of all such material and information
discovered in the future.

 

   

 

 

  4. Acknowledgments - You acknowledge that you are being provided twenty-one
(21) days to consider this Final Release and that the Company hereby advises you
to consult with an attorney of your own choosing prior to signing this Final
Release. You understand that you may revoke this Final Release for a period of
seven (7) days after you sign it by notifying me in writing, and the Final
Release shall not be effective or enforceable until the expiration of this seven
(7) day revocation period. You understand and agree that by entering into this
Final Release, you are waiving any and all rights or claims you might have under
the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act, and that you have received consideration beyond that to
which you were previously entitled.         5. Incorporation by Reference - This
Final Release incorporates by reference, as if set forth fully herein, all terms
and conditions of the January 2, 2020 Agreement between you and the Company,
including the recitation of consideration provided by the Company. By signing
this Final Release, you hereby waive, release and forever discharge any and all
claims that may have arisen through the date of your execution of this Final
Release. You acknowledge that this Final Release is not intended to otherwise
change, alter or amend any of the terms and conditions of the January 2, 2020
Agreement, for which you received adequate consideration, and which Agreement
remains in full force and effect. You acknowledge and agree that you continue to
be bound by the terms and conditions of the January 2, 2020 Agreement.

 

I hereby provide this Final Release as of the current date and acknowledge that
the execution of this Final Release is in further consideration of the severance
benefits to which I acknowledge I would not be entitled if I did not sign this
Final Release. I intend that this Final Release become a binding agreement
between the Company and me if I do not revoke my acceptance in seven (7) days.

 

** /s/ **   **NAME**   Date  

 

To be signed and returned within 21 days after the Separation Date, but not
before the Separation Date.