Exhibit 10.68

 

SEVERANCE AND RELEASE AGREEMENT

 

THIS SEVERANCE AND RELEASE AGREEMENT (“Agreement”) is between Peter O’Hanley
(“Employee”) and AVI BioPharma, Inc. (“Employer”), and is effective on the
eighth day after Employee signs this Agreement (“Effective Date”).

 

The parties to this Agreement wish to set forth clearly the terms and conditions
of Employee’s departure from his employment, and in consideration of the mutual
covenants set forth herein and for other valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:

 

1.   Employee will resign his position effective January 9, 2009 (the
“Resignation Date”). From October 20, 2008 through November 28, 2008, Employee
will devote his full time and attention to his duties for Employer, for which
Employee will be paid full-time, regular compensation (less lawful and required
deductions) on the Company’s regular pay dates. Beginning December 1, 2008
through and including January 9, 2009, Employer and Employee expect Employee to
work no more than two days per week and his salary will be reduced accordingly.
Employee’s last date of work shall be no later than January 9, 2009, on which
date he will be paid all wages, including any accrued but unused vacation earned
through the Resignation date.

 

2.   Employee understands and agrees that by signing this Agreement, the
Employment Agreement between Employee and Employer dated March 22, 2004 (“the
Employment Agreement”) is terminated and Employee and Employer mutually agree to
waive all rights and benefits contained therein. Employee and Employer agree
that their mutual agreement to waive their rights under the Employment Agreement
constitutes valuable and sufficient consideration for the promises contained
herein. Employee understands and agrees that effective immediately, Employer
will be recruiting for a new head of Clinical and Regulatory Affairs, and may,
before Employee’s Resignation Date, hire a person to fill that position. Nothing
in Employer’s immediate efforts to hire a new head of Clinical and Regulatory
Affairs will diminish or alter Employee’s obligations set forth in Paragraph 1
herein; Employee shall devote his best efforts to assist in the smooth and
successful transition of knowledge and responsibilities to any new hire in this
position. In the event he fails to do so, Employer will have the right to
immediately terminate his employment without any further obligation.

 

3.   After the Effective Date of this Agreement, Employee or his covered
dependents may elect to pay for COBRA medical and dental insurance continuation
coverage for himself and/or his covered dependents for the time period and under
such conditions as are provided by COBRA, and Employee may elect to convert any
of his other group insurance coverage to individual policies and self pay for
such coverage according to any individual conversion privileges contained in
such plans.

 

4.   Employee shall receive whatever accrued and vested benefits he is entitled
to receive under the terms of Employer’s Retirement /401(k) Plan, according to
the terms of that Plan and as soon as practicable after the effective date of
this Agreement. Employer shall, to the extent reasonably practicable, deliver
such benefits to the rollover account Employee designates. Employee may leave
his current vested 401(k) benefits in Employer’s Plan; however, Employee may not
make any contributions to the 401(k) Plan after the Resignation Date.
Contributions will not be made to this Plan on behalf of Employee based on the
payments that are made under this Agreement.

 

5.   No later than the Resignation Date, Employee will return all Employer
property in his possession or under his control, including but not limited to
keys, credit cards, files, documents, cellular phones, pagers and laptop
computers.

 

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6.   If Employee files for unemployment compensation benefits, Employer will
inform the Oregon Employment Division that Employee resigned at Employer’s
request and Employer will not contest Employee’s eligibility for unemployment
compensation.

 

7.   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.

 

8.   Employee agrees not to make disparaging or derogatory remarks about
Employer, its products, employees, officers, agents or any person or company
related thereto. The officers of Employer similarly agree that they will not
make any disparaging or derogatory comments about Employee.

 

9.   In exchange for the consideration granted under this Agreement, which is in
addition to the benefits Employee is otherwise entitled to receive, Employee and
his successors and assigns forever release and discharge employer, any of
Employer’s parent, subsidiary or related companies, any 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, trustee, 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, 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 the Employment Agreement, any local, state,
or federal laws prohibiting discrimination in employment, including without
limitation the Civil Rights Acts, or the Oregon State Law Against
Discrimination, 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 wrongful
discharge, breach of contract, defamation, tortuous 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, and that he will not do so at any time in the future concerning
Claims released in this Agreement.

 

10. By signing this Agreement, Employee affirmatively represents that he has not
filed any claim against Employer or any of its Releasees, and is affirming that
he will not file any claim released in this Agreement in the future. Employee
will not, however, be prohibited from filing a claim to enforce the terms of
this Agreement. In addition, to the extent required by law, Employee is not
prohibited from filing or participating in an administrative claim with the
Equal Employment Opportunity Commission (“EEOC”), but because Employee is
receiving severance under this Agreement he waives any right to receive monetary
relief as a result of any EEOC proceeding or subsequent individual or EEOC
lawsuits.

 

11. As a material inducement for Employee to enter into this Agreement and in
exchange for the benefits Employee has given Employer under this Agreement,
Employer and its successors and assigns forever release and discharge Employee,
and any of his heirs, successors, and assigns (collectively, “Releasees”) from
any and all employment-related claims, actions, causes of action, rights, or
damages, including attorneys’ fees (collectively “Claims”) which Employer

 

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may have, known, unknown, or later discovered, which arose prior to the date
Employer signs this Agreement. Employer represents that it has not filed any
Claims against Employee or his Releases, and that it will not do so at any time
in the future concerning Claims released in this Agreement, provided, however,
that this will not limit Employer from filing a Claim to enforce the terms of
this Agreement.

 

12. 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 and seven
days after signing it to revoke it (“the Consideration Period”). Employee may
revoke this Agreement seven (7) days after signing it and forfeit all benefits
described in paragraph 2 of this Agreement by sending written notice of his
intent to revoke to: Beth Chamblin at 4575 SW Research Way, #200, Corvallis, OR
97333. Employee and Employer agree that any changes made to this Agreement
during the Consideration Period as a result of negotiations between the parties
does not restart the running of the Consideration Period.

 

13. This Agreement shall not be construed as an admission by Employer that it
acted wrongfully with respect to Employee.

 

14. 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.

 

15. 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 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.

 

16. 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.

 

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

 

 

DATED this 21 day of October, 2008.

 

DATED this 19th day of October, 2008.

AVI BioPharma Inc.

 

 

 

 

 

By:

Dr.L.Hudson

 

/s/ Peter O’Hanley

Its

President & CEO

 

Peter O’Hanley

 

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