Exhibit 10.71

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made on this 26th day of January,
2009, by and between AVI BioPharma, Inc., an Oregon corporation, with its
principal office at 4575 SW Research Way, Suite 200, Corvallis, Oregon,
(“Company”), and Stephen Bevan Shrewsbury MD, 1100 Lincoln Village Circle,
Apartment 248, Larkspur, CA  94939 (“Employee”).

 

RECITALS:

 

The Company desires to hire the Employee as Senior Vice President — Preclinical,
Clinical and Regulatory Affairs and the Employee desires to accept such position
under the terms and conditions stated herein.

 

NOW, THEREFORE, in consideration of the mutual benefits contained herein, the
sufficiency of which the parties acknowledge, the parties hereby agree as
follows:

 

AGREEMENT:

 

1.             Employment Term.  The term of employment (“Term”) shall commence
on the Effective Date and shall continue until the first anniversary of the
Effective Date, unless extended or terminated in accordance with Section 12. 
This Agreement establishes an “at will” employment relationship, as such term is
defined and used under Oregon law, between the Company and the Employee.  
Employee shall commence employment not later than January 26, 2009 (the
“Effective Date”).  Failure to do so shall be grounds for immediate termination
for Cause, as such term is defined in Section 12 hereof.

 

2.             Duties.  Employee shall be employed as Senior Vice President-
Preclinical, Clinical and Regulatory Affairs and shall have such duties as are
customarily associated with that position, including overall responsibility for
pre-clinical, clinical and regulatory activities and initiatives that will
enable the Company to develop candidates for further clinical activities, and
such other duties as may be assigned to him from time to time by the Company’s
Chief Executive Officer (“CEO”) and the Board of Directors of the Company
(“Board”). Employee shall be a direct report of the Company’s Chief Executive
Officer. Employee shall devote substantially all of his business time to the
service of the Company throughout the Term.  Employee and Company acknowledge
and agree that (i) Employee may hold certain offices within certain entities as
set forth on Exhibit A to this Agreement, (ii) Employee’s devotion of reasonable
amounts of time in such capacities, so long as it does not interfere with his
performance of services hereunder, shall not conflict with the terms of this
Agreement, and (iii) Exhibit A may be amended from time to time by agreement of
the parties.

 

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3.             Compensation.

 

(a)           Base Compensation.  During the Term the Company shall compensate
the Employee at an initial annual salary of Three Hundred Ten Thousand Dollars
($310,000.00), payable in accordance with the Company’s payroll practices in
effect from time to time, and less amounts required to be withheld under
applicable law and requested to be withheld by the Employee (as increased from
time to time, “Base Compensation”). The Employee’s Base Compensation shall be
subject to review for potential increase on an annual basis. Except as otherwise
provided in this Agreement, the Base Compensation shall be prorated for any
period of service less than a full month.

 

(b)           Bonus.  The Employee shall be eligible for an annual bonus of up
to 25% of Employee’s Base Compensation, which bonus shall be paid in the normal
cycle of payment of executive bonuses and upon achievement and satisfaction of
goals and objectives (“Goals and Objectives”) established upon mutual agreement
of the CEO, Employee and the Compensation Committee of the Company’s Board. 
Such goals shall be established concurrently with the goals and objectives of
the Company’s other senior executives.  Employee shall be eligible for
consideration for an award of a full 12-month bonus based on achievement of 2009
Goals and Objectives.

 

(c)           Equity Compensation.

 

(i)                                     On the Effective Date, the Employee will
be granted options to purchase Four Hundred Fifty Thousand (450,000) shares of
the Company’s common stock (the “Options”) under the Company’s 2002 Equity
Incentive Plan (the “Plan”) (a copy of which is attached as Exhibit B, with an
exercise price at the fair market value of the Company common stock on the date
Effective Date;

 

(ii)                                  In addition, Employee will be issued
60,000 shares of restricted stock under the Plan (the “Restricted Shares”).  In
the event Employee remains employed on the 181st day following the Effective
Date, vesting shall commence with respect to such Restricted Shares as of the
Effective Date; and

 

(iii)                               The exercise price of the Options and the
issuance price of the Restricted Shares and all other terms and conditions
associated with the Options and Restricted Shares be determined in accordance
with the Plan. To the maximum extent possible, the Options shall be Incentive
Stock Options. Subject to accelerated vesting or termination as set forth
herein, the Standard Options and Restricted Shares shall vest in equal annual
installments over three (3) years

 

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4.             Expenses.  The Company will reimburse Employee for all expenses
reasonably incurred by him in discharging his duties for the Company,
conditioned upon Employee’s submission of written documentation in support of
claimed reimbursement of such expenses, and consistent with the Company’s
expense reimbursement policies in effect from time to time. The Company will
reimburse the Employee up to One Hundred Thousand Dollars ($100,000) for
reasonable expenses incurred in 2009 to relocate Employee and parts of
Employee’s household in a manner compatible with Employee’s duties hereunder to
the city where the Company’s headquarters are located (“Facility Location”),
including the shipment of personal effects to the Facility Location, and the
customary closing costs associated with the purchase of a residence in the
Facility Location.  In addition, Company shall reimburse Employee (or pay on
Employee’s behalf) rent and related living expenses, not to exceed $2,500 per
month in the aggregate and up to six (6) months in duration for temporary living
arrangements.  In addition, the Company shall reimburse Employee for reasonable
attorneys fees incurred in connection with the review and negotiation of this
Agreement in an amount not to exceed $3,000.

 

5.             Benefits.  Subject to eligibility requirements, Employee shall be
entitled to participate in such benefits plans and programs as adopted by the
Company from time to time and shall be eligible for paid vacation of four
(4) business weeks (20 business days) annually; provided, however, if Employee
does not use all available vacation in any given year, Employee may roll-over up
to one business week (5 business days) to the following year, the parties
intending that Employee shall have a maximum of five (5) business weeks (25
business days) of paid vacation in any year following 2009.

 

6.             Confidentiality.

 

(a)           In the course of his employment with the Company, it is
anticipated that Employee may acquire knowledge (both orally and in writing)
regarding confidential affairs of the Company and confidential or proprietary
information including: (i) matters of a technical nature, such as know-how,
inventions, processes, products, designs, chemicals, compounds, materials,
drawings, concepts, formulas, trade secrets, secret processes or machines,
inventions or research projects; (ii) matters of a business nature, such as
information about costs, profits and pricing policies; (iii)  markets, sales,
suppliers, customers, plans for future development, plans for future products,
marketing plans or strategies; and (iv) other information of a similar nature
which is not generally disclosed by the Company to the public, referred to
collectively hereafter as “Confidential Information.” “Confidential Information”
shall not include information generally available to the public. Employee agrees
that during the term of this Agreement and thereafter, he (1) will keep secret
and retain in the strictest confidence all Confidential Information, (2) not
disclose Confidential Information to anyone except employees of the Company
authorized to receive it and third parties to whom such disclosure is
specifically authorized, and (3) not use any Confidential Information for any
purpose other than performance of services under this Agreement without prior
written permission from the Company.

 

(b)           If Employee is served with any subpoena or other compulsory
judicial or administrative process calling for production or disclosure of
Confidential Information or if Employee is otherwise required by law or
regulation to disclose Confidential Information, Employee will immediately, and
prior to production or disclosure, notify the Company and

 

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provide it with such information as may be necessary in order that the Company
may take such action as it deems necessary to protect its interest.

 

(c)           The provisions of this Section 6 shall survive termination of this
Agreement.

 

7.             Non-competition and Non-solicitation.

 

(a)           For a period of one (1) year in the case of the payment of
severance equal to 12 months Base Compensation and for a period of two (2) years
in the case of the payment of severance equal to 24 months Base Compensation, in
both instances as provided in Section 13(c) below, Employee shall not directly
or indirectly engage in or have any ownership interest in, or participate in the
financing, operation, management or control of, any person, firm, corporation or
business that engages in any activity customarily associated with the Company’s
ordinary course of business at the time of such termination anywhere in the
world; provided, however, that this provision shall not prohibit Employee from
owning up to five percent (5%) of any class of outstanding bonds, preferred
stock or shares of common stock of any such entity or from employment with any
institute of higher learning.

 

(b)           For a period of two (2) years following termination of employment
with the Company for any reason, except with the express written consent of the
Company, Employee agrees to refrain from directly or indirectly recruiting,
hiring or assisting anyone else to hire, or otherwise counseling to discontinue
employment with the Company, any person then employed by the Company or its
subsidiaries or affiliates.

 

(c)           In the event that the provisions of this Section 7 should ever be
deemed to exceed the duration or geographic limitations or scope permitted by
applicable law, then such provisions shall be reformed to the maximum time or
geographic limitations or scope, as the case may be, permitted by applicable
laws.

 

(d)           The provisions of this Section 7 shall survive termination of this
Agreement and the term of employment.

 

8.             Covered Work.

 

(a)           All rights, title and interest to any Covered Work that Employee
makes or conceives (whether alone or with others) while employed by the Company,
belong to the Company. This Agreement operates as an actual assignment of all
rights in Covered Work to the Company. “Covered Work” means products and
Inventions that relate to the actual or anticipated business of the Company or
any of its subsidiaries or affiliates, or that result from or are suggested by a
task assigned to Employee or work performed by Employee on behalf of the Company
or any of its subsidiaries or affiliates, or that were developed in whole or in
part on the Company time or using the Company’s equipment, supplies or
facilities. “Inventions” mean ideas, improvements, designs, computer software,
technologies, techniques, processes, products, chemicals, compounds, materials,
concepts, drawings, authored works or discoveries, whether or not patentable or
copyrightable, as well as other newly discovered or newly applied information or
concepts. Attached hereto as Exhibit D is a description of any product or
Invention in which

 

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Employee had or has any right, title or interest, which is not included within
the definition of Covered Work or which is otherwise excluded from the
restrictions set forth in this Section 8.

 

(b)           Employee shall promptly reveal all information relating to Covered
Work and Confidential Information to an appropriate officer of the Company and
shall cooperate with the Company, and execute such documents as may be
necessary, in the event that the Company desires to seek copyright, patent or
trademark protection thereafter relating to same.

 

(c)           In the event that the Company requests that Employee assist in
efforts to defend any legal claims to patents or other right, the Company agrees
to reimburse Employee for any reasonable expenses Employee may incur in
connection with such assistance. This obligation to reimburse shall survive
termination of this Agreement and the term of employment.

 

(d)           The provisions of this Section 8 shall survive termination of this
Agreement and the term of employment.

 

9.             Return of Inventions, Products and Documents.  Employee
acknowledges and agrees that all Inventions, all products of the Company and all
originals and copies of records, reports, documents, lists, drawings, memoranda,
notes, proposals, contracts and other documentation related to the business of
the Company or containing any information described in this Section 9  shall be
the sole and exclusive property of the Company and shall be returned to the
Company immediately upon termination of Employee’s employment with the Company
or upon the written request of the Company. The provisions of this Section 9
shall survive termination of this Agreement and the term of employment

 

10.          Injunction.  Employee agrees that it would be difficult to measure
damages to the Company from any breach by Employee of Sections 6, 7, 8 and/or 9
of this Agreement, and that monetary damages would be an inadequate remedy for
any such breach. Accordingly, Employee agrees that if Employee shall breach
Sections 6, 7, 8 and/or 9 of this Agreement, the Company shall be entitled, in
addition to all other remedies it may have at law or in equity, to an injunction
or other appropriate orders to restrain any demonstrated breach without showing
or proving any actual damage sustained by the Company. The provisions of this
Section 10 shall survive termination of this Agreement and the term of
employment.

 

11.          Obligations to Others.  Except for items fully disclosed in writing
to the Company, Employee represents and warrants to the Company that
(i) Employee’s employment by the Company does not violate any agreement with any
prior employer or other person or entity, and (ii) Employee is not subject to
any existing confidentiality or non-competition agreement or obligation, or any
agreement relating to the assignment of Inventions except as has been fully
disclosed in writing to the Company.

 

12.          Termination.

 

(a)           Employee may voluntarily terminate his employment with the Company
upon giving the Company sixty (60) days written notice.

 

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(b)           The Company may terminate Employee’s employment without Cause (as
defined below) upon giving Employee thirty (30) days written notice of
termination.

 

(c)           Employee’s employment with the Company shall terminate upon the
occurrence of any one of the following:

 

(i)            Employee’s death;

 

(ii)           The effective date of a notice sent to Employee stating the
Board’s determination made in good faith and after consultation with a qualified
physician selected by the Board, that Employee is incapable of performing his
duties under this Agreement, with reasonable accommodation, because of a
physical or mental incapacity that has prevented Employee from performing such
full-time duties for a period of ninety (90) consecutive calendar days and the
determination that such incapacity is likely to continue for at least another
ninety (90) days; or

 

(iii)          The effective date of a notice sent to Employee terminating
Employee’s employment for Cause.

 

(d)           “Cause” means the occurrence of one or more of the following
events:

 

(i)            Employee’s willful and repeated failure or refusal to comply in
any material respect with the reasonable lawful policies, standards or
regulations from time to time established by the Company, or to perform his
duties in accordance with this Agreement after notice to Employee of such
failure and after Employee has been given a reasonable period of time to cure
such failure to comply; or

 

(ii)           Employee engages in criminal conduct or demonstrably engages in
misconduct that is materially detrimental to the reputation, character or
standing of the Company.

 

(e)                                  Notwithstanding anything to the contrary
herein, unless sooner terminated in accordance with the terms hereof, this
Agreement shall automatically renew for an additional one-year term unless one
party notifies the other party in accordance with Section 14 hereof of its
intention not to renew, such notice to be delivered not less than 90 days before
the term ends.

 

13.          Termination Compensation.

 

(a)           Upon Employee’s voluntary termination of employment, other than
voluntary termination with Good Reason (as defined below), the Company shall pay
to Employee all compensation due to the date of termination, but shall have no
further obligation to Employee hereunder in respect of any period following
termination.

 

(b)           Upon the death of Employee, the Company shall pay to Employee’s
estate or such other party who shall be legally entitled thereto, all
compensation due at the date of death, and an

 

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additional amount equal to compensation at the rate set forth in this Agreement
or then current annual salary rate, whichever is greater, from the date of death
to the final day of the month following the month in which the death occurs.

 

(c)           (i)  Upon termination of Employee’s employment by the Company
other than for Cause and other than in connection with a Change in Control, the
Company shall pay to Employee twelve (12) months of Base Compensation. In
addition, all nonvested Options shall immediately vest and be exercisable for a
period of 180-days following the effective date of termination.

 

(ii)  Upon termination by the Company other than for Cause in connection with a
Change in Control or upon Employee’s voluntary termination of employment for
Good Reason in connection with a Change of Control, the Company shall pay to
Employee twenty-four (24) months of Base Compensation.  In addition, all
nonvested Options shall immediately vest and be exercisable for a period of
180-days following the effective date of termination.

 

(d)           Amounts payable under this Section 13 shall be net of amounts
required to be withheld under applicable law and amounts requested to be
withheld by Employee.

 

(e)           As used herein, “Good Reason” shall mean, following a Change of
Control (as such term is defined below), the termination by Employee upon the
occurrence of any of the below described events. The Employee must provide
notice to the Company of the existence of such event within ninety (90) days of
the first occurrence of such event, and the Company will have thirty (30) days
to remedy the condition, in which case no Good Reason shall exist.  If the
Company fails to remedy the condition within such thirty (30) day period, the
Employee must terminate employment within two (2) years of the first occurrence
of such event.  The events which constitute a Good Reason termination are:

 

(i)                    The assignment of a different title or change that
results in a material reduction in Employees duties or responsibilities;

 

(ii)                   A reduction by the Company in Employee’s Base
Compensation, other than a salary reduction that is part of a general salary
reduction affecting employees generally and provided the reduction is not
greater, percentage-wise, than the reduction affecting other employees generally
or failure to provide an annual increase in Base Compensation commensurate with
other Employees; provided, however, in determining whether to provide an annual
increase in Base Compensation commensurate with an annual increase provided to
other Employees, the Company may take into account factors such as market levels
of compensation, Employee’s overall performance, and other factors reasonably
considered by the Company’s compensation committee and/or Board of Directors, so
long as such determination is not made in bad faith with the intent to
discriminate against Employee; or

 

(iii)                  Relocation of Employee’s principal place of business of
greater than seventy-five (75) miles from its then location; provided, however,
the first such

 

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relocation in connection with the concurrent relocation of the Company’s
headquarters shall not constitute Good Reason hereunder.

 

(f)            As a condition of payment of the amounts set forth in this
Section 13, if requested by Company Employee agrees to enter into a Separation
and Release Agreement substantially in the form attached hereto as Exhibit D.

 

(g)           As used herein, “Change of Control” means the occurrence of any
one of the following events:  (i) any person becomes the beneficial owner of
twenty-five percent (25%) or more of the total number of voting shares of the
Company; (ii) any person (other than the persons named as proxies solicited on
behalf of the Board of Directors of the Company) holds revocable or irrevocable
proxies representing twenty-five percent (25%) or more of the total number of
voting shares of the Company; (iii) any person has commenced a tender or
exchange offer, or entered into an agreement or received an option, to acquire
beneficial ownership of twenty-five percent (25%) or more of the total number of
voting shares of the Company; and (iv) as the result of, or in connection with,
any cash tender or exchange offer, merger, or other business combination, sale
of assets, or any combination of the foregoing transactions, the persons who
were directors of the Company before such transactions shall cease to constitute
at least two-thirds (2/3) of the Board of Directors of the Company or any
successor entity.

 

14.          Notice.  Unless otherwise provided herein, any notice, request,
certificate or instrument required or permitted under this Agreement shall be in
writing and shall be deemed “given” upon personal delivery to the party to be
notified or three business days after deposit with the United States Service, by
registered or certified mail, addressed to the party to receive notice at the
address set forth above, postage prepaid. Either party may change its address by
notice to the other party given in the manner set forth in this Section.

 

15.          Entire Agreement.  This Agreement constitutes the entire agreement
between the parties and contains all the agreements between them with respect to
the subject matter hereof. It also supersedes any and all other agreements or
contracts, either oral or written, between the parties with respect to the
subject matter hereof;  provided, however, in the event any of Sections 6, 7, 8,
9, or 10 of this Agreement is found enforceable in any way, then such section
shall be amended to the extent necessary to conform to applicable law.

 

16.          Modification.  Except as otherwise specifically provided, the terms
and conditions of this Agreement may be amended at any time by mutual agreement
of the parties, provided that before any amendment shall be valid or effective,
it shall have been reduced to writing and signed by an authorized representative
of the Company and Employee.

 

17.          No Waiver.  The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations, shall not be a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand compliance.

 

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18.          Severability.  In the event that any section or provision of this
Agreement shall be held to be illegal or unenforceable, such section or
provision shall be severed from this Agreement and the entire Agreement shall
not fail as a result, but shall otherwise remain in full force and effect.

 

19.          Assignment.  This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and shall be binding upon
Employee, his administrators, executors, legatees, and heirs. In that this
Agreement is a personal services contract, it shall not be assigned by Employee.

 

20.          Dispute Resolution.  Except as otherwise provided in Section 10,
the Company and Employee agree that any dispute between Employee and the Company
or its officers, directors, employees, or agents in their individual or Company
capacity of this Agreement, shall be submitted to a mediator for nonbinding,
confidential mediation. If the matter cannot be resolved with the aid of the
mediator, the Company and Employee mutually agree to arbitration of the dispute.
The arbitration shall be in accordance with the then-current Employment Dispute
Resolution Rules of the Arbitration Service of Portland (“ASP”) before an
arbitrator who is licensed to practice law in the State of Oregon. The
arbitration shall take place in or near Portland, Oregon. Employee and the
Company will share bear the cost of the arbitration equally, but each party will
bear their own costs and legal fees associated with the arbitration; provided,
however, if any party prevails on a statutory claim, which affords the
prevailing party attorneys’ fees, or if there is a written agreement providing
for attorneys’ fees, the arbitrator may award reasonable attorneys’ fees.  The
Company and Employee agree that the procedures outlined in this provision are
the exclusive method of dispute resolution.

 

21.          Attorneys’ Fees.  In the event suit or action is instituted
pursuant to Section 10 or Section 20 of this Agreement, the prevailing party in
such proceeding, including any appeals thereon, shall be awarded reasonable
attorneys’ fees and costs.

 

22.          Applicable Law.  This Agreement shall be construed and enforced
under and in accordance with the laws of the State of Oregon.

 

23.          Section 409A; Section 280G.

 

(a)       It is the intention of the parties to this Agreement that no payment
or entitlement pursuant to this Agreement will give rise to any adverse tax
consequences to Employee or the Company with regard to Section 409A of the
Internal Revenue Code of 1986 (“Section 409A”). This Agreement shall be
interpreted to that end and consistent with that objective. The Company and the
Employee shall, to the extent necessary to comply with Section 409A and
permitted thereunder, agree to act reasonably and in good faith to mutually
reform the provisions of this Agreement to avoid the application of the
additional tax and interest under Section 409A(a)(1)(B), provided that any such
reformation shall not negatively impact the economics of the Company or the
Employee hereunder. Notwithstanding any other provision herein, if Employee is a
“specified employee,” as defined in, and pursuant to, Treasury Regulation
Section 1.409A-1(i) or any successor regulation, on the date of termination, no
payment of any “deferred compensation”, as defined under Treasury Regulation
Section 1.409A or any successor regulation, shall be made to

 

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Employee during the period lasting until the earlier of six (6) months from the
date of termination or upon Employee’s death.  If any payment to Employee is
delayed pursuant to the foregoing sentence, such payment instead shall be made
on the first business day following the expiration of the six (6) month period
referred to in the prior sentence or, if in the case of Employee’s death,
promptly thereafter.

 

(b)      Except as otherwise specifically provided in this Agreement, if any
reimbursement to which the Employee is entitled under this Agreement would
constitute deferred compensation subject to Section 409A of the Code, the
following additional rules shall apply:  (i) the reimbursable expense must have
been incurred, except as otherwise expressly provided in this Agreement, during
the term of this Agreement; (ii) the amount of expenses eligible for
reimbursement during any calendar year will not affect the amount of expenses
eligible for reimbursement in any other calendar year; (iii) the reimbursement
shall be made not later than December 31 of the calendar year following the
calendar year in which the expense was incurred; and (iv) the Employee’s
entitlement to reimbursement shall not be subject to liquidation or exchange for
another benefit.

 

(c)       With regard to any installment payment, each installment thereof shall
be deemed a separate payment for purposes of Section 409A of the Code.

 

(d)      Section 280G

 

(i)                    Except as provided below, the payments or benefits to
which Employee will be entitled under Section 13 of the Agreement will be
reduced to the extent necessary so that Employee will not be liable for the
federal excise tax levied on certain “excess parachute payments” under section
4999 of the Internal Revenue Code of 1986, as amended (“Code”).

 

(ii)                   The limitation above will not apply if:

 

1.               the difference between

 

(A) the present value of all payments to which Employee is entitled under
Section 13 of the Agreement determined without regard to the limitation above,
less

 

(B) the present value of all federal, state, and other income and excise taxes
for which Employee is liable as a result of such payments; exceeds

 

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2.               the difference between

 

(A) the present value of all payments to which Employee is entitled under
Section 13 of the Agreement calculated as if the limitation above applies, less

 

(B) the present value of all federal, state, and other income and excise taxes
for which Employee is liable as a result of such reduced payments.

 

(iii)                  Present values will be determined using the interest rate
specified in section 280G of the Code and will be the present values as of the
date on which Employee’s employment terminates (unless it is necessary to use a
different date in order to avoid adverse consequences under section 280G).

 

24.          Counterparts.  This Agreement may be signed in two counterparts,
each of which shall be deemed an original and both of which shall together
constitute one agreement.

 

 

IN WITNESS WHEREOF, AVI BioPharma, Inc. has caused this Agreement to be signed
by its duly authorized representative, and Employee has hereunder set his name
as of the date of this Agreement.

 

 

 

COMPANY: AVI BioPharma, Inc.

 

 

 

 

 

By:

/s/ Leslie Hudson, PhD

 

Leslie Hudson, PhD, Chief Executive Officer

 

 

 

 

 

 

 

EMPLOYEE:

 

 

 

/s/ Stephen Bevan Shrewsbury

 

Stephen Bevan Shrewsbury, MD

 

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Exhibit A

 

List of Offices Held

 

Shrewsbury Clinical Consulting: Founder - providing limited, or ad hoc
consulting advice to previous employer:

 

·                                          MAP Pharmaceuticals Inc., 2400
Bayshore Parkway, Mountain View, CA

 

and

·                                          Nektar Therapeutics, San Carlos, CA

 

provided:

 

1)  no conflict of interest arises

 

2) total consulting hours not to exceed one day per month

 

3) such consulting work does not interfere with the full performance of duties
for AVI.

 

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Exhibit B

 

2002 Equity Incentive Plan

 

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Exhibit C

Inventions Excluded from Covered Works

 

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Exhibit D

 

SEPARATION AND RELEASE AGREEMENT

 

THIS SEPARATION AND RELEASE AGREEMENT (“Agreement”) is between Stephen Bevan
Shrewsbury (“Employee”) and AVI BioPharma, Inc. (“Employer”), and is effective
eight (8) days after Employee signs this Agreement (“Effective Date”).

 

The parties agree as follows:

 

1.             Resignation. Employee resigned his position as Employer’s [Title]
effective [effective date of termination] (the “Resignation Date”).  Employee
has been paid his salary and other compensation through the Resignation Date,
less all lawful or required deductions.

 

2.             Consideration.   In consideration of Employee’s agreements
hereunder, Employer shall pay to Employee the amounts set forth and described in
Section              of that certain Employment Agreement dated effective the
     day of            , 2009.

 

3.             Return of Employer Property. Employee represents that he has
returned all Employer property in his possession or under his control, including
but not limited to keys, credit cards, files, laptop computer and any and all
Employer documents.

 

4.             Confidentiality. The parties will use reasonable efforts to keep
the terms of this Agreement confidential.  Employee may disclose the terms of
this Agreement to his immediate family.  Employer may disclose the terms of this
Agreement to its officers and managers.  Either party may disclose the terms of
this Agreement to their respective attorneys, accountants, financial advisers,
auditors, or similar advisors, or in response to government requests.  Third
persons informed of the terms of this Agreement shall in turn be advised of this
confidentiality provision and requested to maintain such confidentiality.

 

5.             Release.

 

5.1           In exchange for the consideration paid to Employee as set forth in
this Agreement, Employee forever releases and discharges Employer, any of
Employer-sponsored employee benefit plans in which Employee participates, or was
participating in, (collectively the “Plans”) and all of their respective
officers, members, managers, partners, directors, trustees, agents, employees,
and all of their successors and assigns (collectively “Releasees”) from any and
all claims, actions, causes of action, rights, or damages, including costs and
attorneys’ fees (collectively “Claims”) which Employee may have arising out of
his employment (including Claims that may arise out of Employee’s employment
agreement), on behalf of himself, known, unknown, or later discovered which
arose prior to the date Employee signs this Agreement.  This release includes
but is not limited to, any Claims under any local, state, or federal laws
prohibiting discrimination in employment, including without limitation the
federal civil rights acts, Oregon Revised Statutes Chapter 659A, the Americans
with Disabilities Act, the Age Discrimination in Employment Act, or Claims under
the Employee Retirement Income Security Act, or Claims alleging any legal
restriction on Employer’s right to terminate its employees, any Claims Employee
has relating to his rights to or against any of the Plans, or personal injury
Claims, including without limitation

 

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wrongful discharge, breach of contract, defamation, tortious interference with
business expectancy, constructive discharge, or infliction of emotional
distress.  Employee represents that he has not filed any Claim against Employer
or its Releasees, he has no knowledge of any facts that would support any Claim
by Employee against Employer or by a third party against Employer, and that he
will not file a Claim at any time in the future concerning Claims released in
this Agreement; provided, however, that this will not limit Employee from filing
a Claim to enforce the terms of this Agreement.  Notwithstanding the foregoing,
nothing herein shall constitute release of any of Employee’s rights relating to
vested options, vested benefits or vested entitlements under the Company’s
employee benefits plans, including equity incentive and retirement plans.

 

5.2           In consideration of the promises of Employee as set forth herein,
Employer does hereby, and for its successors and assigns, release, acquit and
forever discharge Employee from any and all actions, causes of action,
obligations, costs, expenses, damages, losses, claims, liabilities, suits,
debts, and demands (including attorneys’ fees and costs actually incurred), of
whatever character in law or in equity known or unknown, suspected or
unsuspected, from the beginning of time to the date of execution hereof.

 

6.             Non-disparagement. Employee and Employer each agree not to make
disparaging statements about each other, except in the case of Employer
statements that are required under applicable federal or state securities laws
or applicable rules and regulations of any exchange on which Employer’s stock is
traded.

 

7.             Consideration and Revocation Periods. Employee understands and
acknowledges the significance and consequences of this Agreement, that it is
voluntary, that it has not been given as a result of any coercion, and expressly
confirms that it is to be given full force and effect according to all of its
terms, including those relating to unknown Claims.  Employee was hereby advised
of his right to seek the advice of an attorney prior to signing this Agreement. 
Employee acknowledges that he has signed this Agreement only after full
reflection and analysis. Although he is free to sign this Agreement before then,
Employee acknowledges he was given at least 21 days after receipt of this
document in which to consider it (the “Consideration Period”).  If Employee
executes this Agreement prior to the end of the Consideration Period, Employee
hereby waives any rights associated therewith. Employee may revoke this
Agreement seven (7) days after signing it and forfeit all benefits described in
Section 13(c) of the Employment Agreement. Employee and Employer agree that any
changes made to this Agreement during the Consideration Period as a result of
negotiations between the parties do not restart the running of the Consideration
Period.

 

8.             No Liability. This Agreement shall not be construed as an
admission by either party that it acted wrongfully with respect to the other.

 

9.             Severability. If any of the provisions of this Agreement are held
to be invalid or unenforceable, the remaining provisions will nevertheless
continue to be valid and enforceable.

 

10.           Entire Agreement. This Agreement represents and contains the
entire understanding between the parties in connection with its subject matter. 
All other prior written or oral agreements or understandings are merged into and
superseded by this Agreement.  Employee

 

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acknowledges that in signing this Agreement, he has not relied upon any
representation or statement not set forth in this Agreement made by Employer or
any of its representatives.

 

11.           Attorney Fees. If any suit or action is filed by either party to
enforce this Agreement or otherwise with respect to the subject matter hereof,
the prevailing party shall be entitled to recover reasonable attorney fees
incurred in preparation or in prosecution or defense of such suit or action as
fixed by the trial court, and if any appeal is taken from the decision of the
trial court, reasonable attorney fees as fixed by the appellate court.

 

12.           Choice of Law. This Agreement is made and shall be construed and
performed under the laws of the State of Oregon.

 

PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES A RELEASE OF CERTAIN KNOWN OR
UNKNOWN CLAIMS.

 

 

DATED this     day of       , 20XX.

 

DATED this     day of       , 20XX.

 

 

 

 

 

 

AVI BioPharma, Inc.

 

 

 

 

 

By:

 

 

 

Name:

 

Stephen Bevan Shrewsbury, MD

Title:

 

 

 

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