EXHIBIT
10.2


 


SEPARATION AND RELEASE AGREEMENT


 


THIS
SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is between Leslie Hudson, PhD
(the “Executive”) and AVI BioPharma, Inc. (the “Employer”), and is
effective eight (8) days after the Executive signs this Agreement (the “Effective
Date”).


 


The
parties agree as follows:


 


1.             Resignation. The Executive resigned his
position as Employer’s Chief Executive Officer effective April 20, 2010
(the “Resignation Date”).  The Executive
has been paid his salary and other compensation due on or before the
Resignation Date, less all lawful or required deductions either as a result of
a termination.


 


2.             Consideration.  
In consideration of  the
Executive’s agreements hereunder, the Employer shall pay to the Executive the
amounts set forth and described in Section 13(d) of that certain
Employment Agreement dated effective the 8th day of February 2008 (the “Employment
Agreement”).  The Executive’s resignation
hereunder is at the request of the Board of Directors of the Company, and
accordingly is treated as an involuntary termination of his employment without Cause by the Company for purposes of Section 13(d) of
the Employment Agreement.


 


3.             Return of Company Property. The Executive
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 Company documents, which shall not include
rolodex or address books (whether in hard copy or electronic) or cell phone number.


 


Release.


 


In exchange for the consideration paid to the
Executive as set forth in this Agreement, the Executive forever releases and
discharges the Employer, any of the Employer-sponsored employee benefit plans
in which the Executive 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
(in such capacities collectively the “Releasees”) from any and all claims,
actions, causes of action, rights, or damages, including costs and attorneys’
fees (collectively the “Claims”) which the Executive may have arising out of
his employment (including Claims that may arise out of the Executive’s
employment agreement), on behalf of himself, known, unknown, or later
discovered which arose prior to the date the Executive 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 the Employer’s right to terminate its
employees, any Claims the Executive 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, tortious interference with
business expectancy, 


 


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constructive discharge, or infliction of emotional
distress.  The Executive represents that
he has not filed any Claim against the Employer or its Releasees, he has no
knowledge of any facts that would support any Claim by the Executive against
the Employer or by a third party against the Employer, and that he will file a
Claim at any time in the future concerning Claims released in this Agreement;
provided, however, that this will not limit the Executive from filing a Claim
to enforce the terms of this Agreement or the Employment Agreement.  This release does not cover your rights of indemnification,
to be held harmless, to contribution or to directors and officers insurance
coverage or with regard to vested benefits or equity.


 


In consideration of the promises of the Executive
as set forth herein and subject to any claims surviving the termination of the
Employment Agreement, the Employer does hereby, and for its successors and
assigns, release, acquit and forever discharge the Executive 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.


 


Non-disparagement. The Executive and the Employer
each agree for three (3) years not to make disparaging statements about
each other, except in the case of statements that are required under applicable
federal or state securities laws or applicable rules and regulations of
any exchange on which the Employer’s stock is traded, to comply with legal
process, normal competitive type statements or to rebut statements of the
other.


 


Consideration and Revocation Periods. The Executive 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.  The Executive was hereby advised of his right
to seek the advice of an attorney prior to signing this Agreement.  The Executive acknowledges that he has signed
this Agreement only after full reflection and analysis. Although he is free to
sign this Agreement before then, the Executive acknowledges he was given at
least 21 days after receipt of this document in which to consider it (the “Consideration
Period”).  If the Executive executes this
Agreement prior to the end of the Consideration Period, the Executive hereby
waives any rights associated therewith. The Executive may revoke this Agreement
seven (7) days after signing it and forfeit all benefits described in Section 2
of this Agreement. The Executive and the 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.


 


Section 409A Compliance. 
Notwithstanding anything to the contrary herein, the following
provisions apply to the extent severance benefits provided herein are subject
to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
and the regulations and other guidance thereunder and any state law of similar
effect (collectively “Section 409A”).   
These provisions are intended either to comply with the requirements of Section 409A
or to provide a basis for exemption from such requirements so that none of the
payments and benefits described in this Agreement will be subject to the
additional tax imposed under Section 409A, and any ambiguities herein will
be so interpreted.  Each installment of
severance benefits is a separate 


 


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“payment”
for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance
benefits are intended to satisfy the exemptions from application of Section 409A
provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9).  Although you are a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code
at the time of your separation from service, the payments under this Agreement
are intended to be in compliance with the requirements of Section 409A(a)(2)(B)(i) of
the Code because payments will either be payable pursuant to the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations or will not be paid until at least 6 months after your
separation from service.


 


4.             Specified Entities. 
For purposes of this Agreement and Section 7 of the Employment
Agreement, the term “Specified Entities” shall mean the following entities (and
their successors-in-interest):  Alnylam
Pharmaceuticals, Inc., Isis Pharmaceuticals, Inc., Prosensa
Therapeutics, Santaris Pharma A/S and BioMarin Pharmaceutical, Inc.


 


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


 


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.


 


Entire Agreement.  Except for Sections 6, 7, 8, 9,
10 and 21 of the Employment 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.  The Executive acknowledges
that in signing this Agreement, he has not relied upon any representation or
statement not set forth in this Agreement made by the Employer or any of its
representatives.


 


Arbitration and Attorney Fees. Section 21 of the Employment
Agreement shall govern any disputes with regard to this Agreement.


 


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 20th day of April, 2010.

  	
  DATED
  this 20th day of April, 2010

  
	
   

  	
   

  
	
   

  	
   

  
	
  AVI
  BioPharma, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ J. David Boyle II

  	
   

  	
  /s/
  Leslie Hudson

  
	
  Name:
  J. David Boyle II

  	
  Leslie
  Hudson, PhD

  
	
   

  	
   

  
	
  Title:
  Interim President and CEO

  	
   

  
				



 


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