Exhibit 10.66


 


Portions
of this document have been redacted pursuant to a confidential treatment
request and filed separately with the Securities and Exchange Commission.  Redacted sections marked with “*****.”


 


AMENDMENT NO. 1


TO


EMPLOYMENT AGREEMENT


 


This Amendment No. 1 to Employment Agreement (the “Amendment”)
is entered into effective the 1st day of August, 2008 (the “Effective
Date”) by and between AVI BioPharma, Inc., an Oregon corporation (“Company”)
and J. David Boyle II (“Employee”).


 


RECITALS


 


A.                                   Whereas,
Company and Employee are parties to that certain Employment Agreement dated the
24th day of July, 2008, a copy of which is attached hereto as Exhibit A
(the “Employment Agreement”).


 


B.                                     Whereas,
the Company and the Employee desire to amend certain provisions of the
Employment Agreement.


 


Now, therefore, in consideration of the representations, warranties and
covenants contained herein, the Company and the Employee agree as follows:


 


AGREEMENT


 


1.               Section 3(c) of
the Employment Agreement shall be amended and restated to provide as follows:


 


(c)                                  Equity
Compensation.


 


(i)                                     On
the date the Employee commences employment with the Company, the Employee will
be granted options to purchase Three Hundred Fifty Thousand (350,000) shares of
the Company’s common stock (the “Standard Options”) under the Company’s
2002 Equity Incentive Plan (the “Plan”), with an exercise price at the
fair market value of the Company common stock on the Effective Date.  Subject to accelerated vesting or termination
as set forth herein, the Standard Options shall vest in equal annual
installments over three (3) years.


 


(ii)                                  In
addition, on the date the Employee commences employment with the Company, the
Employee will be granted options to purchase an additional One Hundred Fifty
Thousand (150,000) options (the “Performance Options” and, together with
the Standard Options, the “Options”) under the Plan with an exercise
price at the fair market value of the Company common stock on the Effective
Date.  The Performance Options shall vest
in the event that *****.


 

















 


Notwithstanding anything to the contrary herein, in the event that the
effect of an event that constitutes a Change in Control (as such term is
defined in Section 13(f) hereof) denies or would reasonably be
expected to deny Employee the opportunity to achieve the vesting milestone set
forth in this Section 3(c)(ii), the Performance Options shall fully vest
upon the effective date of the Change in Control.


 


(iii)                               The
exercise price of the Options and all other terms and conditions associated
with the Options shall be determined in accordance with the Plan and grants
(the forms of which are annexed hereto as Exhibit B and Exhibit C,
respectively). To the maximum extent possible, the Options shall be Incentive
Stock Options.


 


2.               Section 23 of
the Employment Agreement shall be amended and restated to provide as follows:


 


Section 409A; Section 280G


 


(a) Section 409A


 


(i)                          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 (“Section 409A”)
of the Internal Revenue Code of 1986 (the “Code”). 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 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.


 


(ii)      Except
as otherwise specifically provided in this Agreement, if any reimbursement to
which the Employee is entitled under this 


 


2

















 


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.


 


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


 


(b)                                 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


 


(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 


 


3

















 


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).


 


3.               In all other
respects, the Employment Agreement shall remain unchanged and in full force and
effect.


 


IN WITNESS WHEREOF, the parties have executed this Amendment effective
the date first set forth above.


 


 


	
  DATED the      day of August, 2008.

  	
   

  	
  DATED the     day of August, 2008.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AVI BioPharma, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Leslie Hudson, PhD 

  	
   

  	
  J. David Boyle II

  
	
  Title: Chief Executive Officer

  	
   

  	
   

  
				



 


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